Crude prices spiralling as motorists fear hike in Budget
With motorists fearing another hike in the price of petrol and diesel in the Budget, crude oil futures traded at their highest level in two weeks in New York.
Benchmark crude for January delivery rose above $89 a barrel in trading in New York as a measure of manufacturing output in China, the world's second biggest economy, edged higher to 50.6 last month.
Brent crude also edged closer to $112 yesterday.
Motorists concerned about the price of petrol and homeowners worried about heating costs have listened to near constant reports of the rising cost of oil in recent years.
Prices in 2008 spiked and then fell back dramatically in the latter months of 2009, but the overall trend has largely been one of increase since.
Energy analyst Gerry Hennigan of Goodbody Stockbrokers said the price of a barrel tended to react more to supply-side risks rather than economic factors.
"The overall trend has tended to be up and that's driven as much by the perception that demand in the Far East and in the emerging markets is really going to be a factor, not just in the next couple of years but over a protracted period of time," he said.
"The vacillations you then have intermittently are issues like the spring offences in north Africa. They tend to be as much a factor as anything else."
The markets were left jittery earlier in the year as tensions with Iran mounted over threats to shut down the Strait of Hormuz, leaving traders warning of an increase in oil prices.
Back at home, motorists are bracing themselves for the prospect of further price hikes in petrol and diesel in tomorrow's Budget.
Changes in the price of a barrel trickle down to the pump, but the bulk of what motorists pay for petrol and diesel is taken in by the state.
Figures compiled by AA Ireland reveal 54.5pc of the price paid at the pump for petrol goes on taxes, while 57.1pc is sucked up for diesel.
These include excise, carbon tax, VAT and a 2 cent National Oil Reserves Agency (NORA) levy.
However, statistics from the Revenue Commissioners show that the tax take for petrol has fallen fractionally since 2008, when €1.53bn was taken in. Some €1.51bn was brought in last year.
But revenue from diesel increased from €1.12bn in 2008 to €1.24bn last year.