Petrol prices to rise as oil hits record high

Brian O’Mahony, Chief Business Correspondent

The latest increase follows growing political uncertainty in Saudi Arabia and the US decision to close its embassy there. The US said the closure of its diplomatic base in Riyadh and consulates in Jiddah and Dhahran was “in response to a threat against US government buildings”.

It comes less than a week after the death of King Fahd The US said the closure of its diplomatic base in Riyadh and consulates in Jiddah and Dhahran was “in response to a threat against US government buildings”.

It comes less than a week after the death of King Fahd the continuing increases were beginning to hit hard. The cost of petrol has gone up by 27% over the last 12 months, with further increases expected and some analysts are warning some analysts are warning could top $75.

The cost of home heating oil is also set to rise with wholesale prices now 29% higher than they were this time last year. On average, consumers buy 1,000 litres of home heating oil. What cost E 510 this time last year is now E660.

In further bad news for consumers, Bord Gáis was last week awarded a 25% hike in the price of gas. This followed a 12.5% rise last year. The cost of ESB is also set to rise by 2.5%, on the back of a 13% increase in 2004.

The Labour Party has called on the Government to agree a substantial increase in the fuel allowance paid to social welfare recipients.

Spokesperson on Social and Family Affairs Willie Penrose said the National Fuel Scheme, currently paid to over E250,000 households, would barely cover the cost of a small bag of coal.

“The current rate of the weekly allowance, which is paid only from October to mid-April each year, is just a miserly 9. It has not increased since the beginning of 2002. In the meantime the price of many fuels has gone through the roof.

“A number of reports from the Combat Poverty Agency and other bodies have found that Ireland has one of the worst records in Europe in terms of people being able to heat their homes. A report published in February 2004 suggested that up to 2,000 deaths in this country each year could be attributed to fuel poverty,” he said.

Oil cartel Opec announced last week Oil cartel Opec announced last week it has increased production by 300,000 barrels a day in a bid to cool prices.

Saudi Arabia is the world’s biggest oil producer, at 9.5 million barrels a day.

Disruption there would badly hurt the global market.

Oil prices are now 40% higher than a year ago.