Further rises in the price of petrol are likely, despite a small decline in crude oil prices yesterday following a call by Saudi Arabia for an OPEC agreement to pump more oil.
The cost of petrol rose by around 2 per cent in the last month, as unrest in the Middle East and a flat euro triggered a surge in oil prices. Unleaded petrol climbed to an average of 94.4 cent a litre in the first week of May from 92.5 cent in early April and 90.4 cent in March according to AA Roadwatch.
Oil prices hit a 14-year high of $40 (€33.71) per barrel on Friday, falling back to $39.40 late yesterday following calls by Saudi Arabia for OPEC oil output to increase by 1.5 million barrels per day.
With oil prices soaring in recent days, motorists should expect to pay even more over the coming month, as it takes four to six weeks on average for such increases to trickle down to forecourts, said AA spokesman Mr Conor Faughnan.
He stressed that the price was an average, and that wide variation between service stations was not unusual.
The rise could have been avoided had the Government not increased excise duties by 5 per cent in the last budget, said Mr Faughnan.
The Minister for Finance, Mr Charlie McCreevy, had "gambled" on the strong euro absorbing the duty rise - a strategy now proved to be over optimistic. Had duties been untouched, the average price would today be 89.4 cent per litre, said Mr Faughnan.
The petrol industry said it would be several weeks at least before the recent jump in oil prices was reflected at the pump. Statoil said costs would not rise until the company had reviewed its charges, in a week to 10 days.
"A once-off spike in oil prices doesn't necessarily mean an automatic rise in retail costs. The factors governing prices are much more complicated than that," said a spokeswoman.
Irish Shell said competition in the sector was so tight that a surge in oil prices wouldn't necessarily have an immediate impact on motorists.
Maxol said rising oil prices had resulted in a shortfall in margins and that a forecourt price rise was inevitable.
Meanwhile, it has been reported that ConocoPhillips is undertaking scheduled maintenance at its 75,000 barrels per day Whitegate refinery at Aghada, east Cork.
The company would not comment on reports by oil traders that part of the facility was being overhauled. A heavy programme of spring refinery maintenance across Europe has tightened oil supplies, contributing to climbing prices.
