Irish motorists have noticed that the cost of petrol has been climbing over the last few months, with one service station in Dublin charging €2 per litre earlier this week.
It has been reported that the rising price of fuel means that filling your car has not been dearer since 1991.
While some filling stations may be experiencing a more steady increase all round, what has caused prices to shoot up?
CEO of Fuels For Ireland, Kevin McPartlan told the Irish Mirror that, prior to the invasion of Ukraine by Russia, pressure was already building on prices.
“There was a little bit of a hangover from Brexit, because our supply chains often came from the UK. There was a little bit of pressure on production on a global basis because, during Covid-19, a lot of refineries reduced their production.”
McPartlan pointed to last November when there was “quite a spike” in prices.
The ongoing conflict in Ukraine hasn’t made matters any better, though. Certain aspects make a massive difference.
The first is that Russia produces “about 10%” of the world's oil. With sanctions both by governments and companies alike, “essentially, 10% of the global oil production is now out of the market”.
The second point is that Russia produces about 40% of Europe’s gas, McPartlan said.
“When the gas is cut off or the gas price increases, as they did because of other market pressures before, demand for oil increases because countries who are using gas to produce electricity in the power stations say, ‘Well the gas is too expensive, we’ll switch to oil’. What that means is you have decreased supply of oil and increased demand,” he said.
McPartlan doesn’t “see any sign” of prices coming down in the “immediate future and that’s a problem”.
This has a knock-on effect throughout the economy, right down to supermarkets. He said: “When you increase the price of diesel, the price of every product that needs to be taken from one place to another is increased because all the hauliers use diesel and it is the largest part of the expense.
“The price of getting a loaf of bread to the local Tesco or SuperValu has just gone up. Therefore, the price of the bread in Tesco is going to go up. It’s as simple as that.”
McPartlan is calling on the Government to take, not a long, hard look, but a “short, hard” look at the cost of petrol in Ireland in terms of the taxes and levies added to it. “Government really needs to take exceptional measures to make this more manageable for people and it has an inflationary pressure,” he said.
Petrol is not a “discretionary product”, McPartlan said. “You’re not passing the petrol station and go ‘Ah! I’ll grab fuel while I’m here’. It’s not like a Mars bar at the till.
“This is a deliberate purchase because you need it. You have to get to work, you have to drop the kids to school, you have to get your products to market if you're a business. You have to heat your home. That's why people buy fuel,” he said.
