Fuel is costing Irish motorists more than it has in 18 months even as crude oil prices continue to fall, writes Padraig Hoare.
Despite crude oil prices having fallen sharply in recent weeks, a litre of petrol cost €1.38 on average, while diesel costs €1.27, according to the latest monthly survey from AA Ireland.
Fuel costs have now reached their highest level since August 2015 and mark the sixth successive month that costs for motorists have risen. It is generally accepted it takes a number of weeks before motorists see fuel costs fall following a drop in the price of oil. AA director of consumer affairs Conor Faughnan said taxes on fuel here were a major contributory factor to higher prices, not just oil prices.
“While it’s easy to say that the factors which cause these increases are outside of our control as a country, this simply isn’t the case. The majority of what we pay at the pump is made up of various taxes placed on petrol and diesel and the extent to which we tax fuel spend is something we have direct say over,” he said.
The AA said 86 cent of the total pump price for a litre of petrol consisted of various taxes including Vat and excise. Mr Faughnan called on the Government to “reassess the extent” of taxing fuel.
Crude oil prices fell as US drilling continues to climb and Libyan crude ports prepare to reopen, undermining the potential for Opec output curbs to rebalance the market, even if extended into the second half of the year.
US oil this month dipped below $50 a barrel for the first time in 2017 as near-record US stockpiles and rising output weighed on the production reductions by Opec and its allies. US benchmark West Texas Intermediate fell more than 1% yesterday.
Additional reporting Bloomberg
This story first appeared in the Irish Examiner.