Speculators and increasing demand blamed for rise in diesel prices

Market speculators and the winter rise in demand have been blamed for rising diesel prices.

Fuel industry analysts said speculators had bought up stock until prices become more favourable, seen as a good bet because of Europe’s dependence on “unreliable” diesel imports from Russia and Asia and reduced production by European-based refineries.

From the point of view of diesel users, this trend is set to continue due to three European refineries closing this month.

Petroplus, Europe’s largest independent refiner by capacity, is temporarily shut three of its five plants, in France, Belgium, and Switzerland. The sites can process 337,300 barrels of crude oil per day, and their closure could create a diesel shortage in Europe.

Diesel demand always rises in Europe in the winter, linked to consumers filling their home-heating oil tanks.

In November, forecourt prices for diesel in Ireland caught up with petrol prices, which had been about 5c higher.

Pat Rabbitte, the energy minister, said diesel and petrol price differentials depend on supply and demand in the market.

He said there is no price control on petroleum products and it has been the policy objective of successive governments to promote price competition and consumer choice.

Previous surveys had shown that prices relate to refinery prices rather than crude oil prices.