Petrol and diesel drop to lowest prices since 2021 – but new hike on the way within weeks

Prices are now back to where they were in September 2021. But motorists have been warned by AA Ireland that the average cost of a litre of petrol is set to jump by 6pc next month as the Government implements a phased restoration of the full excise duty on the fuel. Diesel is due to go up by 5c per litre on June 1.

The average petrol price across the state is €1.57, AA Ireland said after a query from Independent.ie. This is 1.2pc cheaper than last month, and the lowest since September 2021.

Diesel fuel has dropped in price again compared with last month, with a 2.6pc drop, to an average of €1.47 per litre. Similarly, diesel has not been cheaper in Ireland for 20 months.

AA Ireland’s head of communications Paddy Comyn said: “Prices continue to shrink across the country in May for both petrol and diesel.

“But the start of the reintroduction of excise duty will increase petrol by 6c per litre and diesel by 5c per litre on June 1, with more to follow. If fuel prices remain the same, these increases will see petrol costs increase by 3.8pc and diesel by 3.4pc on June 1.

Mr Comyn said we had known about the gradual restoration of the full excuse duty on motor fuel for some time, but it would still come as another unwelcome increase for motorists after enjoying a period of reasonably stable fuel prices.

After the June 1 increase, another one is due on September 1. That month will see petrol rise by 7c due to the higher excise duty, with 5c going on to diesel.

The Government will fully restore the rates on October 31, with a final increase of 8c for petrol and 6c.

The Exchequer is expected to reap millions of euro from the move to phase out the reduced excise rate on petrol and diesel.

Finance Minister Michael McGrath recently confirmed to Independent TD for Laois-Offaly Carol Nolan that the estimated additional receipts in a full year from the increases in excise duty of a total of 21c on petrol and diesel would amount to more than €700m.

This is made up of additional excise duty of €478m over a full year, and higher Vat of €35m, for diesel; and an extra €159m, plus higher Vat of €35m, for petrol. The Vat is calculated on the higher price once the higher excise duty is applied.

Meanwhile, EV drivers are paying almost identical amounts this month because electricity prices remain high.

The average EV owner is paying €1,131.04 to charge their car over the course of the year, down from €1,138.13 in the previous month.

However, those taking advantage of cheap night rates pay as little as €421.43 to cover the same 17,000km distance.

Those charging exclusively on public chargers could pay up to €2,150.27 annually, AA Ireland said.

Mr Comyn said that with wholesale gas prices falling in recent months, EV drivers were anxiously awaiting a corresponding drop in electricity prices.

Continued volatility in global markets and more long-term hedging means these prices may take some time to be passed on.

AA calculates a diesel car will travel, on average, around 850km on a full tank compared with 700km on petrol, which is why even though diesel is more expensive, the consumer is still likely to use less of it for the same average 17,000km per year.