Fuel prices to rise at Irish pumps following Saudi attack

Applegreen, which has major presence in the Republic, UK and US, issues warning

September 14th, 2019: Drones claimed by Yemen’s Houthi rebels have attacked the world’s largest oil processing facility in Saudi Arabia and a major oilfield operated by Saudi Aramco. Video: Reuters

 

The price of fuel at Irish petrol pumps is set to increase as early as next week following the attack on Saudi Arabia’s oil infrastructure last weekend, retailer and forecourt operator Applegreen has said.

Drones launched by Yemen’s Houthi rebels attacked the world’s largest oil-processing facility in Saudi Arabia and another major oilfield, sparking huge fires.

They disrupted more than half of the kingdom’s oil output and jolted global supplies. Oil prices rose as much as 20 per cent on Monday to above $71 (€64.50) a barrel – the biggest one-day spike in nearly three decades.

Speaking as the company published interim results on Friday, Applegreen chief executive Bob Etchingham said the consequences of the attack would trickle down to Irish consumers.

“There was a spike in international oil prices in the week,” he said. “That will in time be passed through to us. It has moderated somewhat. It’s down to about 5 per cent at this stage, but that will be passed through to all fuel retailers in Ireland in due course.”

He said the process was “probably starting to happen now” as supply lines are “relatively short”.

“You may see price increases coming through at the pumps early next week,” he said, although he would not speculate on the extent of the increases. “There may be some further moves and currency changes as well, so I wouldn’t want to put a number on it,” he said.

Carbon tax

On the possibility of the introduction of a carbon tax in next month’s budget, Mr Etchingham said it was a matter of “when rather than whether” it will happen.

“There are definitely going to be increases coming through in carbon tax,” he said. “There will need to be a big push from Government to encourage electric vehicle adoption.

“That is something we as a business are preparing ourselves for. This past week we installed our first two Applegreen-branded EV charging units at our motorway service area outside Birdhill in Limerick, so we’re getting ready for it.”

On Brexit, Applegreen chief operating officer Joe Barrett said the company was well prepared regardless of the outcome of talks between the EU and the UK.

“We’ve done an awful lot of work on it,” he said. “We had been planning for March 31st, so we have been in contact with all our main suppliers and brand partners. Most of those companies have their own systems in place to counteract any issue.

“Anywhere we think there’ll be a problem, we have identified other suppliers to get the product in. We benefit from having our own distribution system, which helps alleviate any of those issues.

“There will be upheaval and some short-term hiccups until we know exactly what’s happening with Brexit.”

Threefold increase

Applegreen reported a 145 per cent increase in gross profit in its interim results for the six months to end-June, to €268 million. Group revenue increased 73 per cent to €1.5 billion.

Group adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) jumped threefold to €58.9 million from €19.4 million in the same period the year before. The company will pay an interim dividend of 0.66 cent per share.

In the Republic, revenue increased 14.1 per cent and gross profit increased 11.8 per cent. Total fuel gross profit increased 16 per cent. The comparable period in 2018 was impacted by weather disruption in February and March.