Sir, – Average petrol prices in Ireland are determined by four factors – the price of crude oil, refinery margins, the tax component and the euro/dollar exchange rate (crude oil is priced in US dollars).
There appears to be a general perception that petrol is a “rocket and feathers” market, in that higher crude prices are passed on quickly into retail fuel prices but that falling crude takes much longer to impact at the pump.
A study by the Central Bank in 2010 did not find support for an asymmetric adjustment.
Crude oil has actually risen sharply since mid-January, by about 25 per cent, and the retail price will depend on the average price of refined oil over a period, not the price on one day, so it takes time to fully impact. Hence the upward move in petrol prices of late, which has yet to run its course.
Local competition plays a part and there is variation around the average price, as any driver on the N11 can observe. – Yours, etc, DAN McLAUGHLIN Shankill, Co Dublin.