Crude oil collapse prompts calls for greater reductions in petrol prices
Published 26/08/2015 | 02:30
Petrol retailers have been criticised over their failure to significantly cut their prices in response to the collapse in crude oil prices.
Crude oil has hit a six-year low, but prices at the pumps are only due to come down marginally, a body that represents petrol retailers said.
The price of a barrel of crude crashed below $40 this week, half of what it cost a year ago.
However, AA Ireland said the fact that the Government takes more than 60pc of the price of a litre of petrol and diesel means that price reductions for motorists have been limited.
Chief executive of the Consumers' Association Dermott Jewell called on retailers and petrol distributors to ensure that petrol and diesel prices at the pumps correspond closer with crude price drops.
He said we should be seeing larger falls in retail prices given the collapse in crude oil prices.
The average price of a litre of petrol is now 139.9c, with diesel selling at 125.9c, according to the Pumps.ie website that tracks retail prices.
AA Ireland calculated that by July retail prices had fallen by just 7pc in the last year. That had saved an average motorist €145 annually.
Petrol retailers said drivers can only look forward to another 2c coming off the price of a litre of fuel.
David Blevings of the Irish Petrol Retailers' Association said: "We have already seen reductions at the pumps over the past couple of weeks and we should see further reductions of at least 2c per litre on the next fortnight if current reductions remain."
Asked why the reductions have not been greater, he said the price of retail fuels depends on refined product prices out of Rotterdam, and that is influenced by the crude price, interest rates and the throughput of the refineries. "We have not seen a new refinery built in Europe in the last 10 years and refining capacity is at its maximum," Mr Blevings said.
AA Ireland's Conor Faughnan blamed the State's taxation policy for capturing most of the gains from lower fuel prices. Some of the tax on petrol and diesel is a set amount per litre, meaning high taxes are generated whether crude prices are up or down.
"More than 60pc of the retail price of petrol and diesel is tax, so the crude oil price has very little to do with it," he said.
"The good news is that there is a price reduction on the way to us. The euro has since strengthened against the dollar," Mr Faughnan said.