Motorists watching oil rise closely

MOTORISTS are facing into yet another year of rising petrol prices after the price of crude oil peaked at more than $100 per barrel for the first time in two years.

The hike — blamed on the fears of civil unrest in Egypt blocking the Suez Canal — brought the price of a barrel on the futures market up by 63 cents to $100.05 the highest futures price since October 2008.

For Conor Faughnan of AA, yesterday’s rise is not so significant in itself other than the fact that it could mean prices will rise again in three to four weeks.

His fear though is it could spark a trend similar to the one in 2008 which saw prices reach $150 a barrel. If that happens the new taxes and charges heaped onto the price at the pumps since 2008 could see consumers paying huge amounts more for their average fill.

“We are more worried about the medium to long-term effect,” said Mr Faughnan.

“Every time it hits a new high, people wonder if it can get any higher. In 2008 it went up to $150 a barrel. We do not know what the rest of 2011 will hold.

“Hitting over $100 a barrel is not particularly significant. It tells us that there is no sign of them falling.”

He pointed out a rise at the pumps here is governed by a number of factors such as the euro/dollar exchange rate and the wholesale price of refined product on the European market. In fact he pointed out that the latter, after rising previously, had actually come down.

“This is one more nudge upwards. What will continue to happen in the rest of 2011. We saw it go to $150 in 2008. The Government has added a lot of taxes since then. So we could see rising oil prices with the added taxes stacked on top of it.”

Mr Faughnan said the cost of fuel was one of the biggest queries to the AA blog site with many people asking if their local petrol station was ripping them off. The Irish Road Hauliers Association has already vowed to make the impact of rising fuel costs a General Election issue unless politicians engage in negotiations to address the issue as a matter of urgency.

It has called on the Government to immediately introduce a fuel duty rebate for tax-compliant licensed hauliers because it says its members can no longer absorb the increases in fuel costs which, it says, rose by 17% alone in 2010 forcing over 200 haulage companies to fail or cease trading.

The association says the price of diesel has risen by 18 cent per litre, inclusive of carbon tax or the equivalent of 17%, in 2010, while the additional 2c budget increase in the price of diesel has increased the annual cost of keeping just one truck on the road by as much as €3,000 annually.