Diesel and petrol prices climb after recent falls

The cost of petrol and diesel is on the way up again after nearly six months of falling prices, according to an Automobile Association survey.

While the average price of a litre of petrol climbed 1.5 per cent to €1.59 in February compared to the previous month, it is still some way off the historic high that was reached in the middle of September last year when a litre of petrol cost more than €1.70. Diesel is also rising in price and costs €1.54, an increase of 2.9 cent on the figure for January.

Since September prices have been falling gradually. And with the relative strength of the euro against the dollar, there has been a reduction in pump prices across the State.

The AA’s director of consumer affairs, Conor Faughnan, said “2012 was an appalling year for fuel prices, the worst we have ever had”.

“It was the number one issue for motorists last year. This was why we were so strong in our arguments to Government not to increase fuel taxes even more in the December budget. We succeeded in persuading them, although they did increase car tax which was frustrating,” he added.

While prices on forecourts are increasing, the price of oil on world markets has been relatively stable in recent weeks. The price for Brent Crude has crept upwards from just over $110 per barrel at the start of the year to $118 now. Irish consumers did not really feel this initially because the euro crept upwards against the dollar at the same time.

“Internationally, it is hard to fathom the reasons for a rise right now,” said Mr Faughnan. “Forecasts for oil demand in 2013 are quite weak, mirroring economic data, and we even had a relatively mild winter. For the price of fuel to be rising now is surprising and very disappointing.”

Tax increases

While the AA has been unable to pinpoint the reason for the first rise in the average price of a motor fuel in nearly six months, it said that the key reason for high prices continues to be high taxes.

Mr Faughnan said that 55 per cent of the retail price of petrol is tax and he highlighted several tax increases since October 2008 which have added 23 cent per litre to the retail price of petrol.

When the numbers are broken down, the level of tax paid on motor fuel becomes clear. A typical motorist spends about €240 on petrol or diesel every month. Of this €131.50 is tax, so in a single year a typical Irish motorist pays nearly €1,600 in tax on fuel.

“We cannot sustain another year like last year,” warned Mr Faughnan yesterday.

“The year was one long fuel crisis for consumers as the Government stayed deaf to their calls. It did not get worse in the budget, but it did not get better either. The Government will have to be more responsive this year or they will hurt ordinary motorists and they will hurt the economy.”