The cost of fuel in Ireland has risen by around one-third in the past year. That's according to the latest figures from the AA, which has noted that the average price at the pumps this week stands at 170.3c per litre for unleaded, and 160.5c per litre for diesel.
Only negligible decrease in costs last month
"Looking at the figures for January 2021, the average price of fuel stood at 120.8 cents for diesel and 129.9 cents for petrol. This means the price of petrol has increased by 31 per cent in the past year, and there has been a 33 per cent increase in the price of diesel," says Anna Cullen from AA Ireland. "The prices this month are on par with December 2021, with a negligible decrease of about one per cent. They are down by 1.5 per cent on November figures when AA Ireland reported record-high fuel prices," Cullen adds.
Going by these figures, Ireland currently has the 17th most expensive fuel prices in the world, and we're the 12th most expensive in Europe. The most expensive countries include Hong Kong, the Netherlands, Israel, Norway, Finland, Denmark, the UK, Greece, Iceland and Sweden. The majority of the cost of petrol is tax - 60 per cent including both VAT and carbon tax.
OPEC production remains flat
Beyond that, global oil production remains flat since the OPEC cartel introduced a cut in production as demand for fuel fell worldwide in March 2020 (guess why...). While demand has returned almost to pre-pandemic levels, OPEC's production has not kept pace. That lack of production is keeping the wholesale price of a barrel of oil high - Brent Crude, the index which governs the cost of fuel in Ireland - rose to USD$88 per barrel last week, the highest figure since 2014.
"Each month since the pandemic hit, OPEC Plus members have met to set output quotas. In July 2021, the group set out plans to raise the overall output by 400,000 barrels a day (bpd) each month - but they have been missing the targets" says Cullen. "Unless supply meets demand, fuel prices will remain high in Ireland and across the world. We don't see fuel prices coming down any time soon which is really concerning for consumers. We also have to look at our taxation system - 60 per cent at the pumps is a very high figure, so it is within the remit of the Government to ease the pressure on prices that consumers pay."
Inflation pressures
According to the AA, which quotes statistics service Numbeo, Ireland is currently the 16th most expensive country in which to live, and with inflation now above 5.5 per cent, that's only going to get worse. Transport costs went up by 16 per cent in the past year, and are a major driver of that inflation figure.
While expensive petrol isn't necessarily a bad thing from a climate targets point of view - it might make people think a little more carefully about their journeys, and potentially pushes a few more drivers towards public transport and electric cars - the sad fact is that the worst impact of high fuel prices is on low-income groups, who often own older, thirstier cars and who equally often don't have as many options for switching to other modes of transport. "The high cost of living is severely impacting lower-income families and people living in rural areas. They rely on their cars to get around, people in rural areas do not have access to adequate public transport. The options are simply not there," says Cullen.