Fuel prices accelerate to 2008 peak figures

The price of petrol and diesel rose sharply again in the last month, according to the latest fuel price survey from the AA.

Petrol prices are continuing on a steady upward curve towards the record prices which we saw in 2008.

A litre of petrol now costs upwards of €1.27.7c, up a startling 5.30 cent since the start of the year. While diesel remained rather static last month, it has risen sharply this month, adding 2.20 cent per litre, up a total of 2.80 cent since the start of the year, now averaging at €1.17.8 cent per litre.

The most significant factor affecting fuel prices in Ireland is recent dramatic changes in global oil prices. This has particular effect in Ireland due to our high dependency on oil. A barrel of oil now costs approximately $82, up $5 on last month.

In addition to this global phenomenon, Irish motorists are still suffering from the tax increases imposed in the last budget which added four cent to petrol and five cent to diesel. Irish tax hikes are often clouded by fluctuating global oil prices.

“What is most striking is how much fuel prices are headed towards 2008 prices,” says AA director of policy Conor Faughnan. “If those on low pay were unable to cope with record prices then, they are even less likely now."

In March of last year, a litre of petrol cost only 103.4 cent. It has risen by 19 per cent since then. Diesel has also risen by 19 per cent from an average this time last year of 95 cent. Low prices experienced in 2009 were in response to oil prices dropping below $35 per barrel.

While we are reading about falling prices in the economy, clearly it is not happening for motorists. Motor insurance premiums seem to be rising in sync with fuel prices, a further blow to motorists.

These fluctuations in fuel prices over the past number of months are a key concern to the public as they impact on the rate of inflation and Ireland’s competiveness. Further increases could back-fire on economic recovery.

Survey

A recent study undertaken by the AA Ireland earlier this month conveyed that for Irish diesel car owners, the tax take at the pump has risen nearly three times more than the average for western Europe in the last 15 months. This is according to an analysis of pump prices and tax changes in 10 western European countries.

Ireland’s diesel drivers have witnessed the proportion of fuel cost that is tax increase by 8.33 per cent, well above the 2.89 per cent average for the countries surveyed. In five of those countries, the tax-take is lower now than in November 2008, reflecting the collapse in the European wholesale price of diesel. It is a saving that has been denied to Irish, UK, Dutch, Belgian and Spanish drivers.

Since the increases in fuel taxes in last December’s budget, 70 per cent of the retail price of petrol and 58 per cent of the retail price of diesel is now tax. This is made up of excise duty, VAT and the carbon tax. The fuel duty and VAT on a litre of petrol in Ireland has risen 3.56 per cent. The duty amount and the carbon tax are fixed whereas the pre-tax cost of the fuel fluctuates with oil prices. Hence the lower the pump price, the higher the proportion of that price which is tax.

There is not much we can do about this, but we can all continue to be price conscious here at home. The AA is reiterating its advice to motorists to shop around for fuel rather than staying loyal to garages out of habit. Prices vary substantially, plus or minus six or seven cent per litre above or below the average.

Saving even five cents per litre will mean keeping an extra €7.50 in your pocket every month (a car that does 19,200 kms or 12,000 miles per year at a fuel economy rate of 30 miles per gallon will use 150 litres of fuel per month )

For full details on fuel prices, log on to: www.aaireland.ie/petrolprices which also includes European price comparisons.

Money Saving Tips

·

•Buy fuel in units of litres, not euros. This makes it obvious where you get the best value

• Shop around: don’t always use the same garage out of habit

• Drive smoothly and slowly; a harsh driving style burns more fuel

• Air conditioners are thirsty and can add up to 10 per cent to fuel usage. Switch them off if they are not needed

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