IRISH MOTORISTS will have to spend over €1,400 a year more on fuel than they did just three years ago if current forecourt prices are maintained, the AA has warned.
The average price of a litre of petrol in the Republic has now hit €1.70, according to the fuel price tracking website pumps.ie.
Worse is yet to come for consumers, with prices expected to climb by at least another five cent over the coming days, as international markets remain jittery over conflicts in Syria and Yemen and Iran’s dispute with the US and Europe over its nuclear programme continues.
AA spokesman Conor Faughnan said it was inevitable the cost of fuel would increase in the weeks ahead.
However, he described speculation that the cost of a litre of petrol would soon top €2 as alarmist and not based on any realistic assessment of current events.
Earlier this week, he suggested prices would hit €1.70 per litre within a week or 10 days and they reached that record high in just half that time. In January 2009, the price of a litre of petrol was just 90.5 cent.
Mr Faughnan said local garages were not the “villain of the piece”, although he accepted that they were often the lightning rod for consumer anger.
He said they were “not making huge money” from motorists.
“Although many motorists have great difficulty believing it, the garage is at the end of the food chain and makes very small margins,” he said.
According to Mr Faughnan, a garage would be lucky to make four or five cents per litre of petrol sold. “If you buy 20 litres of diesel and a cup of coffee, they are literally making more money on the coffee,” he said.
For their part, wholesalers do a little better and will make about eight cent per litre.
“But the biggest snout in the trough is the Government,” Mr Faughnan said.
Irish motorists currently pay 23 per cent VAT on motor fuel, in addition to mineral oil tax and carbon tax of 58.8 cent per litre on petrol and 47.9 cent per litre on diesel.
The Government this week ruled out reducing taxes on motor fuel despite calls from the Opposition to follow the example of France, which announced earlier this week that it was cutting taxes on petrol and diesel.
Just how much money the Government was making from Irish motor fuel was outlined by Mr Faughnan.
“If you are doing 12,000 miles per year and getting 30 miles per gallon from your car, you will therefore use 150 litres of fuel per month. At current prices, that will cost you €255. Of that, the garage will make somewhere in the region of €7.50 in profit, the wholesaler about €12, [while] the Irish Government will take a whopping €139.
“We are being ripped off – there is no doubt that the conspiracy theorists are right about that. But it is our Government, not our local retailers, that is doing the ripping,” he said.
Oil fell below $115 a barrel yesterday but the cost of crude was still heading for a fourth weekly gain because of lower exports from Iran, a drop in North Sea supply due to oilfield maintenance and the risk of weather-related disruption to Gulf of Mexico output.
The Department of Finance refused to comment last night, but it is understood increases in vehicle registration tax (VRT) and road tax will take effect from early next year.
The Government is also reportedly considering changing the VRT rules because of concerns that too many new cars are classified as low-emission and falling into lower tax bands.
An alternative tax system is under consideration that will increase the VRT charged on new cars. The Department of Finance has not commented on any potential changes.
