Irish motorists are set to be hit with sharp increases in their fuel costs after the price of oil reached an 18-month high.
Oil rose by as much as 6.5% yesterday after the Organization of the Petroleum Exporting Countries (Opec) and some of its rivals reached their first deal since 2001 to jointly reduce output to try to tackle global oversupply and boost prices.
The price of Brent crude — which hit a session peak of $57.89 a barrel, the highest since July 2015 — is 50% higher than at this time last year, marking the largest year-on-year rise on any given day since September 2011.
Conor Faughnan, director of consumer affairs at AA Ireland, said there were a number of factors going against Irish motorists at present, which made a rise in fuel prices inevitable.
He said: “The current exchange rate between the dollar and euro, the wholesale price of refined products in European markets, and now the spike in the price of oil are unfortunately going to put pressure on the Irish motorist.”
The Irish Road Haulage Association warned the rise in fuel prices could affect employment as well as extra costs to consumers besides fuel.
The hauliers’ president, Verona Murphy, said: “We are already worried about what Brexit will bring. There is no buffer there. On top of insurance premiums, we will inevitably see a big spike in fuel costs. We mightn’t have any choice but to pass that on to the consumer. There are around 50,000 direct and indirect jobs that may be affected. That’s the reality of it.”
Opec agreed last month to cut output by 1.2m barrels a day for six months from January, with top exporter Saudi Arabia cutting around 486,000 barrels a day to curb oversupply that has dogged markets for two years.
Over the weekend, producers from outside Opec, led by Russia, agreed to reduce output by 558,000 barrels a day, short of the target of 600,000 barrels a day but still the largest contribution by non-Opec ever.
It has led to predictions Irish motorists could see increases as sharp as 10 to 12 cents a litre in the next two months.
The average price for a litre of petrol in Ireland was €1.32, while a litre of diesel averaged €1.22, according to fuel price aggregation website Pumps.ie yesterday.
Mr Faughnan called on motorists to “be intelligent, shop around and stop ripping themselves off” by sticking to the same fuelling station as prices rose.
He said: “It is actually extraordinary how some motorists take little notice at how much they spend on fuel. We would urge motorists to help themselves and shop around. The differences in price at various stations can be quite significant.”
He said it would be a mistake to label a spike in oil prices as the main reason for sharp increases in fuel, saying the Government had imposed “super-taxes” at the height of the financial crisis that had never been removed.
Mr Faughnan said: “There was 20 to 25 cent per litre added in emergency taxes that are still in place. For all the talk of Opec, Oman, Russia, Brexit, and Trump, 70% of Irish petrol costs are tax.”
The cost of motor insurance, followed by fuel costs, are the biggest worries of Irish motorists, according to the results of a survey carried out by one of the country’s most popular online marketplaces, Carzone.ie, last month.
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