Government pressed to change oil prices to euro

Road hauliers want the government to use the EU presidency to lobby for a major change to the world oil market.

The change would see the price of oil quoted in euro rather than the present base currency of US dollars and would bring “a massive boost to the eurozone,” according to the Irish Road Haulage Association (IRHA).

IRHA president Eamonn Morrissey said the 30% slide in the value of the dollar had not resulted in cheaper oil prices in euro terms. He criticised oil companies for failing to pass on to road users the savings they were making by buying oil using cheaper dollars.

Mr Morrissey said oil companies used currency fluctuations to justify price increases but that a switch to euro pricing would put an end to this and bring real benefits for road users. A decision by the Irish government and the EU to buy oil using euro would be a significant step towards making the change.

The IRHA’s call for euro pricing is not unique. A number of oil-producing states in the Persian Gulf are known to be suffering from the dollar’s slide and complain of a “double whammy” effect. The oil they produce is earning them less in their own currency, while the euro’s appreciation has made imports from Europe more expensive and puts pressure on Gulf economies.

Former Iraqi leader Saddam Hussein whipped up anti-US sentiment in the region by calling for a switch to euro pricing before the collapse of his regime.

Russian president Vladimir Putin is believed to be a supporter of euro pricing and the authorities in Iran are also debating the benefits of such a change.

The Organisation of Petroleum Exporting Countries (OPEC), which holds effective control over the world oil market, has suggested that the dollar’s depreciation cannot be allowed to continue undermining its 11 member countries’ revenues.

OPEC said in December that it watched the dollar’s performance on the currency markets “with concern”.

The group also said it would “take any measures, when deemed necessary, to maintain market stability and avoid price fluctuations” and will hold an extraordinary meeting in Algeria next month to assess the world oil market.