Boost for drivers as experts say petrol and diesel prices are set for more reductions
Published 14/01/2016 | 02:30
Motorists are set to benefit from further reductions in fuel prices.
As the price of crude oil continues to collapse on international markets, experts said more retailers will lower their prices.
Diesel has fallen to less than €1 a litre on some forecourts, with petrol under €1.20.
Queues have formed at filling stations offering the discount prices.
Garages in Mayo and the north-west of the country have seen the lowest prices.
But some forecourts are maintaining prices at high levels, prompting motoring body AA Ireland to complain that pump prices are falling too slowly.
Conor Faughnan of the AA said further falls in petrol and diesel prices are on the way.
This follows crude oil falling to a 12-year low of less than $30 a barrel on international markets.
Reductions at the pumps have not been more exten- sive partly because 60pc of the price of petrol and diesel is swallowed up by government taxes.
Petrol Retailers' Association spokesman David Blevings said prices could further fall by between 5c and 10c a litre for both fuels.
"We could see 5c to 10c coming off the price if crude prices continue to fall and this is passed on in the market," he said.
Mr Blevings said the profit margin for petrol retailers is very low because so much of the price at the pumps goes to government duty, carbon tax and VAT.
"The recent reductions in crude oil prices will work their way into refined product prices and retail prices in the next week," he added.
Prices have fallen by 30pc since the end of 2013, said Mr Blevings, who added that low fuel prices could be here for at least three years.
International investment bank Goldman Sachs has issued warnings that the price per barrel will probably continue to fall and may even reach closer to $20, with some analysts predicting it might even go as low as $10.
The average price of a litre of petrol is now 125.9c, with diesel at 114.9c across the country, according to Pumps.ie.
Mr Faughnan said further price reductions are coming through, "but they are coming through a little slowly".
He said that, on average, retailers pass on price reductions, despite some people being convinced that the opposite is true.
Motorists would be paying even less if it was not for the high rate of tax, he added.
"We should be buying petrol for less than a euro a litre, but we won't because of the extra austerity era taxes that have been applied since the crisis began and haven't been lifted," said Mr Faughnan.
This time last year, motorists reported paying as little as 122.8c per litre of petrol and 117.8c for diesel.
Oil prices fell again yesterday after a rise in weekly US crude inventories fed into bearish sentiment about the deepening global supply glut that has brought prices close to levels not seen since 2003.
Brent crude was down 37c at $30.49 a barrel.
Analysts at Morgan Stanley warned that a rise in demand for crude could be lower than previously expected.
"Any slowing in the rate of demand growth could delay the timing of rebalancing and ultimately a price recovery," they said in a research note.