Call to investigate soaring diesel prices

CONSUMER chiefs last night called on the Government to investigate why diesel is costlier than petrol despite tax incentives to lure motorists away from unleaded.

Diesel is 132.4 cents a litre, with 46% of the pump price made up of excise duty and tax. Petrol is cheaper at 124.9c, even though 54% goes to the Government in tax.

According to AA Ireland figures, we have the second highest price of diesel in the eurozone and are behind only Italy, where the fuel is 134.4c a litre.

In Europe only three countries — Sweden, Norway and Britain — have higher diesel prices.

In a strongly worded letter, the Irish Road Hauliers Association warned Taoiseach Brian Cowen that the Irish economy will suffer because of soaring diesel prices. According to the IRHA, Ireland is the EU’s most truck-dependant country.

The competitiveness of the Irish transportation industry is being threatened, its president Jimmy Quinn said.

AA Ireland said the high prices were acting as a disincentive to motorists as the Government wanted drivers to switch over to diesel on environmental grounds.

Spokesman Conor Faughnan said he was concerned that diesel prices — which traditionally rise above petrol prices in winter — had yet to fall back below unleaded. Diesel rises in winter when demand for home heating oil goes up.

Mr Faughnan said he could understand why the rising costs of a barrel of crude oil pushed up prices of petrol, diesel, aviation fuel and heating oil.

“But that does not explain why diesel is affected so much worse than petrol at the moment.”

Industry analysts predict a 3c rise in the price of a litre of diesel and petrol next month, maintaining the gulf between the two.

Mr Faughnan said he no longer believed the blame lay in the worldwide lack of capacity to produce diesel at refineries and on the glut of cheap petrol.

The Irish Petroleum Industry Association said diesel was higher than petrol because of increasing demand: “EU refineries are not able to produce enough to meet demand and Europe imports 25 million tonnes of diesel a year, mainly from Russia.”