The price we're paying at the pump for both petrol and diesel has risen considerably in recent months, but according to AA Ireland, we're not seeing any of the supply constrictions that are affecting the UK as yet.
Prices up by 30c per litre in a year
"Petrol prices in this country are at an average of 155.9 cents per litre and diesel is at 144.9 cents per litre. Prices have jumped 24.8% since this time last year for petrol and 24.4% for diesel in the same period. This time 12 months ago the average petrol price was 124.9 cents per litre, while diesel was at 116.5," says Anna Cullen from AA Ireland.
Demand for oil rising again
The Covid-related lockdowns last year caused one of the worst years ever for the global petro-chemical industry. The Head of the International Energy Agency suggested recently that 2020 represented the worst year in the history of the oil markets. BP said oil consumption fell by a record 9.1 million barrels per day, or 9.3 per cent last year, its lowest level since 2011.
"However in Ireland, with traffic volumes back above 95 per cenrt of pre-pandemic levels on most routes, and with winter approaching us, temperatures are set to drop even more. Demand for oil has risen and will continue to rise even more. In the UK, there is the issue of petrol supply shortage, and long queues were witnessed buying fuel amid fears it might run out. This has been labelled as 'panic buying'. We are assured that the issues facing the UK aren't a problem for us here in Ireland, so consumers don't need to worry," says Cullen.
Brent Crude price rose this week
Nonetheless, the prices at the pumps are going up - Brent Crude Oil rose to $80.22 per barrel on Tuesday (28th), which was an increase of 0.9 per cent. It eventually settled at $79.09. The three-year high for oil prices came as OPEC (a wider group of oil exporters including Russia, Mexico, Brunei and Malaysia) forecast that global demand for crude would exceed 2019 levels in 2023, and would continue to rise until 2035 before plateauing.
It's expected that an upcoming meeting of OPEC will see production capacity increased. If that decision is made, you could potentially expect to see a slackening of pump prices within two to three weeks. It is important to note that fuel prices and petrol prices are affected by more than just the price of oil. More than 60 per cent of the price at the pump is accounted for by tax. Taxes include excise duty (duty added to the sale of mineral oils, cigarettes and alcohol), carbon tax (calculated per ton of CO2 generated), VAT and NORA (National Oil Reserves Agency. NORA is added to all oil fuels to ensure that Ireland meets its EU obligations of keeping a 90 day stock of oil in the event of a shortage.