Fuel Prices Continue To Rise

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aa.logoThe price of petrol and diesel rose sharply again in the last month. Petrol was up by 7.2 cent per litre to an average of 116.0 cent at the pumps. Diesel also rose, adding 3.1 cent per litre and now averaging 104.0 cent.

The culprit is international oil prices which are now rising again in response to increased global demand. Oil was at its highest in the most recent cycle some ten months ago when the price peaked at $148 per barrel. Sharp falls followed in the sudden global downturn and by Christmas Day the price had reached $33 per barrel.

“In January we were paying less than 95 cent per litre for both fuels.” Says Director of Policy Conor Faughnan. “Petrol has gone up by 22% in five months. While we are reading a lot about falling prices in the economy generally it is clearly not happening for motorists.”

“Increased oil demand is taken as a positive sign for the global economy, so perhaps it is a chance to be positive.” Says Faughnan. “But let’s not forget that before we had a credit crunch we had an oil price crisis, and we do not want to go back there again.”

The AA is reiterating its advice to motorists to shop around for fuel rather than staying loyal to one or two garages out of habit. Prices vary substantially, plus or minus 6 or 7 cent per litre above or below the average. Saving even 5 cents per litre will mean keeping an extra €7.50 in your pocket every month.

Are garages ripping motorists off?

The AA is regularly asked whether the oil industry is taking unfair advantage of the Irish consumer by putting prices up faster than they come down. The AA has looked at this matter in detail in recent times, and has contributed to studies done by the National Consumer Agency and the Competition Authority.

While some individual garages may apply opportunistic price increases there is no substantive evidence of any systematic attempt to keep prices high.

“There is no smoking gun evidence of the industry chancing its arm in this way.” Says Faughnan. “We know because we looked. In most cases the garage owner is a small business at the end of the food chain. Prices vary, but the level of competition is quite good overall.”

There is a separate international concern about fuel prices from the big oil companies at European level. AA Ireland, together with colleague organisations like OAMTC (Austria), ACP (Portugal) and ANWB (Netherlands) is monitoring this and at the motoring club’s prompting the European Commission is examining the issue.

AA money-saving tips:

·         Buy fuel in units of litres, not euros. This makes it obvious where you get the best value

·         Shop around: don’t always use the same garage out of habit

·         Drive smoothly and slowly; a harsh driving style burns more fuel

·         Air conditioners are very thirsty and can add up to 10% to fuel usage. Switch them off if they are not needed