Motorists in Ireland recently saw a significant fall in petrol and diesel prices. In recent weeks prices have been plunging across the whole country and, according to experts, the trend is going to continue throughout January: fuel prices are going to fall another 6-7 cents by the end of the month.
On one hand, it is obvious that Ireland is experiencing a drop in fuel prices, but on the other hand, it is also reasonable to point out that this drop is not as high as it should be. According to AA Ireland’s Conor Faughnan, whose words have been reported by The Independent, we could be paying as little as €1.00/litre, or even less, if taxes were not so high. Oil prices are not at a six year low but Irish fuel taxes are at an all-time high; this is why motorists are still not receiving the full benefit.
Still, according to Faughnan, a 10 cent drop per litre can save the average motorist (who uses 150 litres a month) about €18.00 a month.
At some pumps, prices are actually falling but others remain stubbornly expensive.
Faughan also reminds us that in early 2009, motorists paid less than €1.00/litre for fuel and since then they have experienced five tax hikes: excise duty, carbon tax, the ‘NORA’ (National Oil Reserves Agency) levy and VAT. Excise duty, carbon tax and the NORA levy are all fixed independently of the retail price at the pumps. So while the drop in oil prices is good news, we are not actually feeling its real value as taxes are still very high.
Hypothetically, a tax-free fuel could exist that would probably cost around €0.50/litre.
Meanwhile, international trends such as high production levels for crude oil, together with low global demand, will help keep prices extremely competitive in the coming months.
Central Statistics Office figures show that petrol prices in Ireland fell by just 3% in 2014, with diesel dropping by 5.5%.
Department of Finance sources have dismissed any possibility of reducing the Government's tax take at the pumps. Fuel retailing in Ireland has been described as "a high turnover but low-profit margin" business.
