Litre of diesel could hit €1.60

COST-CONSCIOUS motorists who opted for diesel cars to save money are finding the fuel costs as much — if not more — than petrol on the garage forecourts.

The Automobile Association (AA) has warned that diesel prices look set to rise further due to growing world demand.

Budget 2012 won’t help hard-pressed drivers much either as carbon taxes and VAT increases are all being predicted. The AA has said it is possible diesel could hit €1.60 per litre after the December budget.

In recent years, there has been an average six or seven cent gap between petrol and diesel prices but this gap has closed up in recent days.

In the US, diesel and heating oil supplies are reported to have fallen by 16% in the past two months, according to the Energy Department. In Europe, Netherlands’ stocks are at their lowest in three years.

Rising fuel imports by China, the world’s second-largest oil consumer, are also a big drain on international diesel supplies.

AA director of policy, Conor Faughnan, said the rise in diesel prices is not confined to Ireland, or Europe.

He said: “Firstly, the price of a barrel of oil is unnaturally high at the moment. Some have suggested this is because investors are buying commodities like oil and gold rather than speculating on currencies.

“Secondly, hikes in diesel prices are normal at this time of the year as the weather gets colder. However, I have to say that prices have risen much further this year than other years and the weather isn’t even that cold yet.”