Oil prices low but prices at pumps continue to rise

OIL prices may still be close to historic lows, but a visit to the pumps in County Wexford can be a painful experience, with petrol in particular seeming to rise week by week.

Speculators gambling on reduced oil supplies makes the price of a barrel of oil rise, driving up wholesale fuel prices. This in turns fuels the increase passed on to the forecourts and ultimately to us poor motorists.

You might think that with oil priced on world markets and with Irish duties and taxes set, that there would be some consistency across the prices we pay at the pump.

However, the opposite is often the case and as petrol station owners can charge what they like in our free market economy, there are wild variations in prices, even in the same town.

Over the New Year holiday, there was as much as 6 cents a litre in the difference between prices charged in Wexford town, and two cents a litre between petrol stations a few hundred metres apart. The discounting is over and prices are now around 25 per cent more than they were at this time last year when some local garages were selling diesel for a euro a litre, albeit not for long.

It still pays to shop around. Don’t just put in €20 or €30 worth of fuel and do take note of the per litre price you fill up.

A check of at the pump prices around the county shows some varation, however, many forecourts in areas where there is little competition charge very similar prices. They would argue that their prices are market-led rather than as a result of any agreement between business rivals.

And you might think that the same company trading in different County Wexford towns would charge the same price, but take the example of Tesco in Wexford town which is asking 123.9 for diesel and 133.9 for petrol and Tesco on New Ross, where the pricing is four cents a litre more expensive for diesel and petrol, bringing the supermarket broadly into line with prices charged elsewhere in the town.

A survey of forecourt prices yesterday (Monday), showed that Centra, Whitemills, in Wexford town, was the most expensive at 127.8 for diesel and 138.9 for petrol, while three Wexford town forcecourts, Doyle’s 1798 Street, Wexford Service Station, Newtown Road, and Applegreen, in Drinagh, were the cheapest at the same figures of 123.8 for diesel and 133.8 for petrol.

The AA quotes average pump prices countrywide of 136.3c a litre for petrol and 126.0c a litre for diesel for this January. Total taxes are 86.26c for petrol and 73.63c a litre for diesel, of which excise duties (including carbon tax) account for 58.771c on petrol and 47.902c a litre for diesel. VAT is charged at 23 per cent. The estimated retailer margin is 4c a litre for petrol and diesel, with wholesaler margins double that.

Oil is priced in dollars, which means that even if the global oil price is low - around half of what it was several years ago - prices at the pump could still be high because the value of the euro is down against the dollar.

The average price of a barrel of oil is €55.89, with the current exchange rate quoted as €0.94 to the dollar.

Our petrol and diesel prices are at the higher end in the EU. In Austria for instance, motorists pay 109.0 for petrol and 101.0 for diesel, in Cyprus 112.0 for petrol and 111.0 for diesel and in Estonia 105.0 for petrol. In cash-strapped Greece, motorists pay a whopping 152.0 for petrol and a cheap price of 115.0 for diesel.

Across the water in the UK, average pump prices are €122.0 for a litre of petrol and €123.0 for diesel.