A number of service stations were selling petrol and diesel at more than €2 a litre at the weekend as the effect of Russia’s invasion of Ukraine hit international oil prices.
Oil is selling at slightly more than $118 a barrel on the international markets, with a price of $120 a barrel seen as translating into €2 a litre for petrol at Irish filling stations, a spokesman for AA Ireland said.
This is a huge increase on two years ago, when the effect of the pandemic on international demand saw oil being sold for €15 a barrel, and petrol selling for €1.12 a litre in Irish service stations.
Because the cost of a litre of fuel at a service station is approximately 60 per cent tax, the spokesman said, drivers are paying approximately €1 a litre in tax when the fill their tanks.
“Paying €2 a litre has become a type of psychological line in the sand,” he added. It is a price threshold at which consumers begin to get concerned.
“For an average car, travelling 17,000km a year, you are paying approximately €800 more a year now than you were two years ago.”
As recently as late February, petrol was selling at about €1.77 a litre. Given the price rise is due to the war in Ukraine, the only way the Government can affect the price at the fuel pump is by reducing the tax rate.
Tánaiste Leo Varadkar has predicted the war started by Russian president Vladimir Putin is likely to see oil prices go higher and higher.
Help consumers
Last week he said the Government may intervene to help consumers prior to the October budget.
“Given what is happening in Ukraine, the potential is there for the price to continue to escalate,” the AA Ireland spokesman said.
Those being hardest hit are people with oil- and diesel-fuelled cars in rural areas who cannot use public transport or cycle to work, and have incomes that mean they cannot afford to buy an electric car, he added.
There was a significant difference between the rates being charged by a number of service stations contacted by The Irish Times on Sunday.
The rate at which prices are rising can be affected by how frequently a station receives fresh deliveries.
The Circle K station on St Peter’s Road in Dublin 12 was charging €1.86 for petrol and €1.82 for diesel, while the Maxol Service Station in Ballymany, Newbridge, Co Kildare, was selling petrol for €1.97 a litre and diesel for €1.94 a litre.
“It cuts a big hole in your fares,” taxi driver Philip O’Brien said of the price increases while waiting for a fare at the rank on College Green, Dublin.
“I haven’t yet estimated what it will mean in extra spending but it will be at least €20 a week.”
Mark Monnelly said he spends approximately €80 a week on fuelling his taxi.
“It’s early days yet, but the writing is on the wall,” he said. “You could be talking an increase of 50 per cent, judging by the way things are going.”
The effect of the price increase is that either his disposable income will be squeezed, “or I work longer hours to make up the shortfall”.
