Motorists are in line for 'modest' fall in petrol prices at the pump
Published 08/07/2015 | 02:30
The cost of petrol could fall by two cent per litre following a downturn in oil prices amid ongoing uncertainty in Greece.
Oil prices fell sharply after the Greek rejection of a proposed bailout deal, and as China rolled out emergency measures to prevent further turbulence in the country's stock market.
These developments have fuelled worries about poor growth in demand amid a global oversupply of oil.
IBEC chief economist, Fergal O'Brien, said, on balance, it looks like there will be "modest" benefits for the Irish consumer.
"If there is no further change, then the price of petrol per litre could fall, most likely in the region of two cents."
Speaking to the Irish Independent, he said over the past week there has been around a 10pc drop in the world dollar price of oil.
"But the euro has weakened by about 2.5pc which offsets some of the gain to the Irish consumer in terms of lower import fuel prices.
"Some 60pc of the pump price is tax - so obviously the pass-through is not as great as many people might expect.
"Nevertheless, and despite the high tax component of the pump price, we would expect to see some modest gains for consumers over the coming weeks."
Oil prices plunged on Monday as Greek voter defiance against austerity measures sparked turbulence in global markets.
With the prospects for the Greek economy increasingly uncertain, authorities there extended an eight-day bank closure until Thursday, amid fears cash machines in the country were running dry.