Motorists now face 1c a litre fuel hike
MOTORISTS face yet another 1c hike at the pumps, with petrol prices set to rise again within days.
Prices smashed through the €1.50-a-litre barrier at many stations two weeks ago, although some subsequently reduced prices to just under €1.50.
However, oil company Maxol warned yesterday that prices will rise again in the next few days.
Maxol group chief executive Tom Noonan linked the increase to the volatile situation in Libya and the threat of unrest in Saudi Arabia, which has fuelled speculation on world oil prices.
"It's likely that prices will rise by over 1c a litre in the next few days and the number of stations where it's over €1.50 a litre will increase," he said.
Mr Noonan said his comments related to Maxol stations, as he could not speak for other petrol wholesalers.
But the pressures were the same for all of them, as they based their prices on the latest world trading prices.
The price for Brent crude oil was hovering around US$115 (€84) a barrel yesterday.
"It does not suit Maxol to have prices at this level, because our margin doesn't go up if prices rise. We are just passing on the increased price for oil," Mr Noonan said.
While the aftermath of the earthquake in Japan had dampened demand there, the biggest driver of oil prices was speculation by hedge funds which reacted more to political concerns than classic supply and demand.
Mr Noonan said Irish drivers had become price conscious about where they filled up, although this didn't have a major effect on the volume of fuel sold as people still needed to get around.
However, high prices were affecting the home heating oil market as people cut back on refills.
"I don't know if people are putting on an extra overcoat or what, but they're definitely holding off, or else buying much smaller volumes," Mr Noonan said.
The cost of home heating oil has soared by over 40pc to over €840 for 1,000 litres.
AA policy director Conor Faughnan said there was some hope of a fall in prices in the next 10 days but it would be very slight.
The average price of petrol this month has been a record €1.494 per litre; while diesel is also at an all-time high of €1.45, according to an AA survey published last week.
The website pumps.ie was reporting an average price of €1.499 for petrol yesterday.
However, dozens of stations are charging more than €1.50 per litre.
One analyst said concerns about Libya had now been fully priced into the market, and the price of oil would fall back by the end of the year.
Eugen Weinberg, head of commodities research at Commerzbank AG, told Bloomberg: "The price will stay at elevated levels of around $110 (€80) to $120 (€88) for several months and will drop back to $90 (€66) by the year-end."