Irish motorists suffered the year from hell for fuel prices in 2011 and as the new year begins the prospects are not good, according to the AA.
“It may be illogical in a weak economy but European fuel prices are high,” said AA director of policy Conor Faughnan. “European fuel is refined to very exacting specifications and in recent years refineries are complaining of very tight margins. The upshot for us is that between the unavoidable effects of international prices and the own-goal of super-taxes imposed by the Irish Government it will be Irish drivers who pick up the tab.”
Mr Faughnan added: “Irish fuel prices closely track the world and European markets except when the Irish Government adds more taxes. The AA has carried out a comparison of world oil prices, the euro movements against the dollar and retail prices paid in Ireland. The data shows that despite many motorists’ suspicions the retail price in Ireland does suggest healthy price competition but the State’s regular interventions are pushing prices ever higher.
“Vast fortunes are made from fuel, no doubt about it. However they are not being made by local garages in Ireland.”
Mr Faughnan continued: “2011 was the year of record high fuel prices for Ireland, in no small part due to the four consecutive fuel tax hikes, and frustration among many motorists reached fever pitch. Time and again we’ve seen these frustrations directed towards Irish retailers, however what many people don’t realise is that their profit margins on fuel are in fact very small. Local prices are essentially driven by two things – taxation and the price per barrel of oil.”