'Big shock' for drivers as price of petrol hits €1.50 a litre
Many stations could not even afford to fill their tanks fully
PETROL prices smashed through the €1.50-a-litre barrier overnight, as filling stations passed on the cost of recent oil price hikes.
One wholesaler said that while prices yesterday were averaging €1.47 to €1.48, this would go over €1.50 in many areas today. Diesel is also up around 2c to between €1.43 and €1.45 a litre.
Wholesale petrol-price increases of 2c per litre plus VAT came into effect last night, meaning stations will raise their prices by 2c to 3c as they restock this weekend and into next week.
The increase comes as consumers brace themselves for expected interest-rate hikes next month, amid concerns that food prices will also soar as high oil prices have knock-on effects across the economy.
The Irish Petrol Retail Association (IPRA) said the €1.50 price was a "shock" for drivers and would inevitably lead to reduced demand as people put off unnecessary journeys.
"Motorists are already cutting down on fuel purchases after all the recent increases, so this is bound to have a major impact," said IPRA chief executive Michael Griffin.
"When petrol prices went over €1, that was a shock, so there's no doubt people will find €1.50 a major shock."
The incoming government should cut excise on fuel, as the levy swallows 70pc of the final price at the pumps, he said.
Filling stations had a very low margin on fuel prices, and a study by the National Consumer Agency showed there was no profiteering in the struggling sector, as reduced demand also hit sales of food and other products in service station shops, Mr Griffin said.
Many stations could not even afford to fill their tanks fully because this costs €54,000 each time.
The AA said the latest increases had been on the cards for the past three weeks since oil prices surged amid political upheaval in the Middle East.
"The increases will not be introduced uniformly, as there is a lot of variation between filling stations, and it can depend when they restock, but unfortunately the price will be up across the board," said AA policy director Conor Faughnan.
Oil prices had soared as high as $120 a barrel on foot of the unrest in Libya, but the good news was that they had stabilised and even fallen a little, rather than continuing to soar, he said.
"It's bad but it's not getting worse, which is a pretty miserable crumb of comfort, but it's the only one we've got at the moment," he said.