Irish exporters have warned that rising crude oil prices are hurting the recovery in the country's export industry.
John Whelan, chief executive, the Irish Exporters' Association, said yesterday that while the weakening of the euro against the dollar was helping Irish exporters, most of the benefits were being eroded by the increase in oil prices.
The price of crude oil, which reached a record of $60.95 (€50.49) a barrel in New York on Monday, has risen by almost a third since May amid concerns of a global strain on production and refining capacity.
"Oil price increases are working their way down the supply chain pretty quickly," said Mr Whelan. "If the cost rises above $60 a barrel, it is in real danger of choking the upswing in exports we had been seeing."
Earlier this month, the fuel surcharge on export shipments to the US, the largest recipient of Irish exports, increased by 64 per cent to $304 per 20-foot container.
Meanwhile, air freight shipments by FedEx were hit by a fuel surcharge of 11.5 per cent during May.
The companies being hit most by the higher oil price are computer firms such as Intel, Dell and Hewlett Packard, and food companies that export items in bulk, he said.
While the first quarter of the year was disappointing for Irish exporters, with merchandise sales down by about one per cent, things had started to look up for the industry, said Mr Whelan.
Since the beginning of the year, and particularly in the last six to eight weeks, Irish exporters have been benefiting from the decline in value of the euro against the dollar, he said, adding that if things continue as they are, all the benefits the industry was seeing are going to be eroded.
The common European currency has lost nine per cent against the dollar since January.
Mr Whelan called for increased transparency in negotiations so that the true impact of the fuel price increases could be felt on both sides.
He also expressed concern that many shipping, air freight and road transport companies were increasing their fuel charges in advance on the expectation that oil prices would continue to rise.
Oil prices fell to below $58 a barrel yesterday after an unexpected rise in US crude oil inventories.
