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Thursday 14 December 2017

Motorists face petrol price hike in new year

Laura Noonan

AFTER struggling through some of the toughest driving conditions during the big freeze, embattled motorists are facing the prospect of another hike in petrol prices in the new year.

As the cost of oil surged to a two-year high on the international markets yesterday, AA spokesman Conor Faughnan last night confirmed that the higher prices were "likely" to be passed on to drivers at the pumps.

The latest AA price survey shows Irish motorists are already paying an average of 140.1c a litre for petrol -- up almost 40pc on the cost of a litre in December 2008.

"Demand (for oil) is up right across the globe, we've had a major cold snap here in western Europe and now the east coast of the US has been hit as well," Mr Faughnan said.

"As sure as apples fall from trees, that kind of rise in demand is going to push up global oil prices ... and petrol prices here are likely to go up as well."

He stressed that rises at the pumps should lag behind international oil price rises by a couple of weeks, so Irish drivers shouldn't experience the effects of yesterday's price spike until well into January.

Previous hikes in oil prices have also triggered fuel surcharges from airlines and spelled misery for taxi drivers, hauliers and other businesses dependent on oil.

Mr Faughnan pointed out that the bulk of the petrol price hikes piled on the Irish consumer in recent years stemmed from soaring taxes and not international oil prices.

Tax on a litre of petrol rose by 4c earlier this month, adding to a 4c tax rise in December 2009 and an 8c tax rise in October 2009. Duties on diesel have also risen.

The tax rises meant that petrol prices in Ireland remained high throughout the summer despite a collapse in global prices in May, when a barrel of oil cost less than $68 (€51).

The cost of that same barrel briefly topped the $91 (€69) mark yesterday -- its highest price since October 2008 -- before falling back a few cent in afternoon trading.

Traders blamed the rises on weather-driven surges in international demand, coupled with comments from the oil producing countries' organisation, OPEC.

Cartel

Qatar's oil minister yesterday said he did not expect the oil cartel to meet before its next scheduled gathering in June.

The comments were seen as ruling out any imminent rise in oil supply, and some experts now expect global oil prices to cross the $100 (€76) barrier earlier in 2011.

While the prices are well above the $32 (€24) a barrel enjoyed in December 2008, $100 a barrel is still significantly below the $147 (€111) reached when prices peaked in July 2008.

Mr Faughnan pointed out that while the latest spike in oil prices means some rises are inevitable, drivers have the option to shop around if garages hike prices by more than they should.

Irish Independent

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