Retailers warn West facing petrol drought as forecourts close

ADVANCE warning signs of “No Petrol Ahead” could soon be erected in rural Ireland as service stations close down their pumps, a retailers group has warned.

Motorists in the west of Ireland could find themselves driving up to 50 miles before locating a petrol station the Irish Petrol Retailers’ Association (IPRA) said.

In the past five years, the number of petrol stations in Ireland has dropped from 1,700 to 600 — with the West worst affected, the IPRA said.

High property values in the east of Ireland have also dealt another blow to garages in and around the capital.

Motorists travelling from Howth towards Dun Laoghaire are now faced with a 14-mile stretch with no petrol available as seven stations have closed.

Dunmore East in County Waterford and the Whitegate area of east Cork, the site of the country’s only oil refinery, are now also without petrol outlets.

IPRA has blamed poor profit margins coupled with high capital costs, the advent of the minimum wage, growing need for technological investment, rising insurance costs and increased environmental and health and safety requirements for many of the closures.

Meanwhile, petrol forecourt sites are doubling in value.

“A growing number of retailers have taken investment funds from the petrol companies to do up their stations and are now tied to a tight price structure, whereas others, like Tesco, can buy on the spot and avail of drops in prices. It is getting increasingly difficult for others to compete,” IPRA chief executive Oliver Lupton said.

“Regulation is another huge issue. For instance, interceptors, which are vessels used to trap spillage, must now be a minimum of 6,000 litres. They would have been just 2,000 litres before this and they now require an expensive network of drains.

Such changes require huge investment and there are no grants available.”

Meanwhile petrol stations in prosperous suburbs in cities have doubled trade expectations when they have been sold on the market to property developers.

It’s estimated that one petrol station in Douglas in Cork sold for €6 million, even though initial estimates put its value at €3.2m.

It’s also understood that Esso made 25% more than anticipated from the sale of 15 sites last year and this influenced their decision to put another 10 on the market.

Shell have closed stations at Harcourt Street and Balbriggan in Dublin and two in Waterford. Statoil, meanwhile, are pulling out of the Irish market as they have failed to make the returns they expected.

“We are facing a situation where we will have stations controlled by a few small groups who will cherry-pick populous areas. The garage owner will be the type of person who has access to up to 2.5m,” Mr Lupton warned.

A spokesman for Topaz Energy, which runs the Shell network admitted property prices influenced their decision to put a number of forecourts on the market. A Texaco spokesman said there is a trend where “more fuel is sold through less sites”.