Petrol prices on way down

PETROL prices at the pumps are beginning to fall below 99.99 cents per litre as world oil prices fall.

The Automobile Association's (AA) Conor Faughnan said a lead-in time of close to four weeks usually passes before oil price increases and decreases are passed on to consumers.

Mr Faughnan said their latest petrol price survey should be concluded by the end of the week and they are anticipating an average price of 98.10 cents a litre.

"Motorists should shop around, as some retailers are quicker to drop prices than others," he added. The AA advises motorists to research prices in their area.

IBEC's director of transport Reg McCabe welcomed the drop in fuel prices and the positive impact this will have on the economy and inflation.

"The convergence of petrol and diesel prices is a cause for concern with the gap now down to just a few cents. This is a phenomenon which bears investigation," he added.

Yesterday, crude oil futures fell to their lowest in a week on speculation world oil supply can meet demand.

The Organisation of Petroleum Exporting Countries (OPEC), which pumps two out of every five barrels worldwide, may be able to add one million barrels a day to its current spare production capacity by the end of the year if needed, OPEC President Purnomo Yusgiantoro said in Sydney.

And Iraq resumed pumping through a northern export pipeline.

As crude oil prices fall, the prices at the pumps paid by Irish drivers are beginning to reflect the down-turn in global markets.

Already some suppliers like the Texaco Garage on the Churchtown Road on Dublin's south-side have cut the cost of a litre of unleaded petrol to 94.90 cents.

Prices have also fallen in Midleton, Co Cork, where competition has resulted in two garages dropping the price to 94.80 according to irishfuelprices.com.

Brent crude oil for October delivery was down 21 cents at $40.55 a barrel on London's International Petroleum Exchange yesterday. On the New York Mercantile Exchange, October crude fell 29 cents to $43.02 in electronic trading.

OPEC is trying to influence global markets confirming that oil prices were high because of the so-called "political premium" as terrorism threats, the Iraq war and other factors affect traders.

Purnomo Yusgiantoro says that the premium is adding $10-$15 a barrel to the price of oil, which hit a record high of almost $50 a barrel last month.

The OPEC president believes the world is paying too much for oil and wants to bring it down to a more realistic price.

Additional reporting Bloomberg and Reuters.