Watchdog: Customers may suffer over fuel costs

Customers could face a raft of price rises if the cost of fuel continues to soar, a leading price watchdog said today.

The Consumers Association of Ireland said any increased costs of goods or services may not be immediately revealed due to a poor price monitoring system.

Dermot Jewell of the association said: “You forget how much transportation is at the background of goods and services.

“The difficulty there is businesses are adverse to absorbing costs, and will try to pass them on.”

Petrol prices on garage forecourts around the country have shot up to just under a euro a litre over the last few weeks.

International instability in the Middle East region has caused crude oil prices to soar to around €40 a barrel and the price of the euro against the dollar has also had adverse affects.

Road hauliers have already pointed out the strain of the soaring fuel costs on their business by holding a protest outside the Dail last week.

Trucks from the Irish Road Haulage Association rolled in to Dublin’s Kildare Street as members called on the Government to lower the excise duties.

Levies increased after ministers slapped an extra 5 cent onto every litre of petrol or diesel purchased in last December’s budget.

AA, the motorist lobby group, said over the past two months the cost of a litre of petrol has crept up from an average of 91 cent to close to a euro.

The group’s Conor Faulknan said this is due to the international price of oil but at home it could also be blamed on Finance Minister Charlie McCreevy’s extra 5 cent excise duty.

“We told him he was taking a gamble,” Mr Faulknan said.

“It is not just the hauliers it is affecting, fuel is a component of almost everything in the economy.

“Almost everyone in the country has to buy petrol and it is a monthly bill for households.

“It is a basic expense that just went up significantly.”

The AA said around 67% of the retail price of a litre of petrol, and 60% of diesel, goes straight into the Government coffers in taxes and excise duties.

And customers could feel the pinch from a variety of different goods and services.

“Think of any business in which it is a requirement to distribute on a nationwide basis,” Mr Jewell said.

“You have transportation costs on things like food products, delivery of white goods and services. And there are so many reps on the road.”

Consumers have already seen the effect of the rising fuel costs after the ESB announced, on the back of oil increases, it would be applying for a rate hike.

British Airways is only one of several airliners to impose a fuel surcharge on ticket prices due to the rising oil prices.

Des Cummins of the Driving Instructor Register of Ireland said his members would also suffer with the costs of refuelling.

Mr Cummins said a driving school car could cover an average of 25-miles in a one-hour lesson and use around four litres of petrol. He said it would certainly affect the price of driving lessons.

The consumer representative group said there seems to be more worry than actual increases so far, though people may not notice other prices creeping up on a variety of goods.

The association said customers may not be keeping a close eye on delivery charges and they may rise.

Mr Jewell said: “If businesses try to absorb them then they will advertise it and that will be good for competition.”

And budget airline Ryanair has confirmed it will not pass on the rising oil costs to consumers.

“We have such a low costs base we can absorb it without need to pass it on to the customer,” a Ryanair spokesman said.

“Fuel costs can double and we’ll still be okay though other companies are whacking on surcharges.”