Fuel heading to €2 a litre as drivers hit by excise hike

More rises are expected soon

Fears have been raised that the price of petrol and diesel is heading to €2 a litre.

It comes after the latest fuel price survey from AA Ireland shows that this month’s increase in the cost of fuel at the pumps was the highest this year.

Diesel prices rose by 13c and petrol by 9c, with higher crude prices and a hike in excise duty at the start of the month pushing prices up.

War in the Middle East and a weak euro relative to the dollar is increasing the cost of crude oil imported into this country.

The surge in prices has prompted the Consumers’ Association of Ireland (CAI) to call on the Government “to get a grip” and to postpone another hike in excise duty due in August.

The April AA Ireland fuel survey shows the average cost of petrol has risen to €1.81 a litre, with diesel increasing to €1.78. These are the highest prices reported this year.

The Government intends to restore the full excise duty on petrol and diesel in August, which will mean the cost of a litre of petrol will rise by 5c once Vat is added. There will be a 4c hike on diesel.

Excise duty was cut by 21c on diesel and 16c on petrol at the start of 2022 over fears prices were heading to €2 a litre at the pumps.

CAI chairperson Michael Kilcoyne called on the Government to hold off on the planned August rise in excise duty and to row back on last month’s rise.

Mr Kilcoyne said there was now a real fear that motorists would soon be paying €2 a litre.

“The Government needs to get a grip here. They need to postpone the August rise in excise duty and reverse the April rise,” said Mr Kilcoyne.

“They don’t have to make it so difficult for people to live. People are sucked dry from the cost of everything rising at the moment”.

He said more than half of the cost of a litre of petrol and diesel was going to the Exchequer in the form of taxes and other duties. Fuel price rises were feeding into other costs, such as those for transport.

Jennifer Kilduff, head of marketing and PR at AA Ireland, said: “Unfortunately, and as expected, the decrease we saw in March – underpinned by the border counties reducing their prices – was short-lived.

“The first re-instatement of excise duty which came into effect on April 1 has now been reflected in pump prices reported across most of the country in April.”

Border petrol retailers had reduced prices last month to compete with Northern Ireland competitors that can now sell fuel cheaper. The UK government has postponed excise duty hikes for a year.

Electric vehicle fuel costs this month remain relatively steady, with a marginal increase of €1 over the year meaning EV owners can expect to pay around €926 compared to last month’s €925 to cover the national average of 17,000km per year.

Kevin McPartlan of Fuels for Ireland, the representative body of fuel importers, said that any move by Iran to go through with its threat to bomb oil refineries would send crude prices spiralling upwards.

Finance Minister Michael McGrath has said he is keeping fuel taxes under review ahead of the final increase in excise duty in August.