Petrol station owners are making significant profits and should resist "for as long as possible" the temptation of passing on supplier price increases to the motorist, the Consumers' Association of Ireland has said. The association's chief executive, Mr Dermott Jewell, urged motorists to shop around "because the price of petrol is one of the most openly displayed prices in the country". Gordon Deegan and Conor Lally report.
"I really think there is a great business opportunity for garages who are interested in attracting customers by being as competitive as possible. If they could hold out on passing on the price increase I think many consumers would remember them for it well into the future and it would win over people's loyalty."
The price of oil is hovering around all time highs and the State's oil suppliers are expected to raise the price of petrol by around three cent per litre in the coming days. Most garages will pass on this increase to motorists.
Mr Jewell said many garages which charged more for petrol often did better trade than those which sold cheaper petrol. This "defies logic" and it was incumbent on motorists to get the best value possible. While new garages run by Tesco were among the cheapest, they were too few to "make any real dent on the market".
A petrol station in Lisdoonvarna, Co Clare, which has broken the €1 barrier for petrol, charging €1.04 per litre, said it is making a profit of just four cent on each litre sold.
Ms Teresa Flanagan of Flanagan's Garage, Lisdoonvarna, confirmed yesterday that it is being charged 99.9 cent per litre by its oil distribution company, Emo Oil Ltd. "Over the past couple of weeks, we have been selling our petrol at cost price of 99.9 cent to customers, but we had no choice but to put up our prices last Monday to €1.04 per litre. We are nothing more than glorified tax collectors with a margin of just four cents and we are just tired of the flak we have been getting from customers.
"We have had enough. How are we going to exist with price pressures like this? We have already seen the end of the small shop. Are small stations like ourselves being squeezed out?"
Ms Flanagan said that if customers pay by credit card, 2.4 cent on each litre is taken off the profit margin of 4 cent.
AA Roadwatch has urged motorists to buy petrol in units of litres rather than in units of euro. By doing this, it says, motorists can more easily identify how value fluctuates over time and from garage to garage.