Irish Shell announced yesterday that petrol prices will increase by 2.9p a litre from Monday and the other oil companies are expected to raise their prices shortly.
The likely increases by all the major oil companies are estimated to range from 2p to 3p and motorists have been advised to shop around as they could save as much as 4p a litre.
Yesterday, Mr Conor Faughnan of the AA said the Irish Shell announcement was not unexpected and it seemed likely that the other companies would follow.
He said it was likely there would be an increase of an average 3p a litre. "At the moment the average price is 66p per litre and the increase will probably mean going up to 68p to 69p. But the consumer can save an awful lot by shopping around. In fact there could be as much of a difference as 4p," he said.
All companies would have to follow Irish Shell, he said. "All the companies have to respond to the same market forces and they are dictated by the value of the euro against the dollar and the price of crude oil." He said at the moment the euro had fallen against the dollar and there had been a rise in crude oil prices. The price of petrol at home was always subject to international factors.
Mr Faughnan said that even with the increase, however, petrol would still be much cheaper than it was a year ago.
Irish Shell yesterday attributed the increase to what it described as the continued sharp increases in the cost of oil products resulting from supply constraints and high global demand. This was reflected in a 30 per cent increase in supply prices over the last four weeks.
Some service stations have been told about increases. Maxol garages contacted yesterday said prices went up on April 17th. However, price increases have not been passed on yet as they will take effect when existing supplies run out. Some Esso and Texaco service stations said yesterday that they had not yet been told of a price increase but acknowledged they could possibly receive notification next week.