Latest Increases Bring Pump Prices To Highest Level Since 2015

AA Ireland has called on the Irish Government to reassess the extent to which it taxes both petrol and diesel after the latest AA Fuel Prices analysis found that prices are now at their highest level since late 2015.

Recent analysis from the AA found that the average price of a litre of petrol in Ireland now costs 147.6c, up from an average of 141.0c in May. Meanwhile, a litre of diesel currently costs 137.8c on average, up from 131.0c in mid-May. Currently fuel prices are sitting at their highest level since November of 2015, with the AA warning that the need to reassess the tax placed on both fuels has now become urgent given the upward trend in pump prices.

The latest increases means that the cost of petrol has increase by approximately 9c since the start of 2018, while diesel prices are up over 10c since the year began, something which the organisation warns puts many Irish workers in a situation where they are struggling to afford the costs of their commute to work.

“No-one is arguing for the taxation on fuel to be ultra-low, but it is time for government to re-assess the current, exceptionally high level of tax that is placed on both petrol and diesel as price hikes continue to put more and more strain on Irish workers. In particular, given that we are often hearing from Leinster House that the recession is behind us, it’s time for the 20c of ‘emergency taxes’ introduced during the worst years of the economic crisis to be reduced or removed,” Conor Faughnan, AA Director of Consumer Affairs stated. “As a predominantly rural country we are, in part due to our history of underinvestment in public transport, hugely reliant on the private car for our day-to-day travel and between surging pump prices and a lack of government commitment to resolving the motor insurance crisis people are being priced off the roads.  With fuel prices continuing to climb, there is a risk that some people will start to view the costs of commuting to work as unsustainable currently or that those currently looking for employment may not be able to meet the cost of attending interviews or re-joining the workforce.”

“At some point, the government will need to accept the reality that, until we have established a viable public transport system in Ireland, excessive taxation on fuel is driving people out of the workforce, with these people contributing less revenue through taxation. Our government can either take the short-term win that fuel taxes provide, or they can take a more long-term view that making commuting more affordable will be a greater benefit to our economy.”

Among the key contributors to rising prices at the pump has been the volatile nature of the cost of a barrel of crude oil throughout this year.

In recent weeks crude oil costs have dipped slightly, with a barrel of oil floating between $75 and $78 throughout early June – a slide drop from the highs of $80 per barrel seen in late-May. However, even which this drop is taken into account, crude oil prices are still up almost $10 from April of this year.

“The recent dip in crude oil costs is certainly something which is welcome, but as many fuel stations would have bought their current stock when crude oil prices were higher people can still expect to pay more at the pump than any point in 2018 to date. We also need to be cautious about looking at the dip in oil prices and thinking this is a new trend,” Faughnan added. “In response to a global upward trend in fuel costs, oil producing nations such as Russia and Saudi Arabia vowed to increase their production levels, but this is a short-term solution at best. If we want to keep commuting costs affordable for the average worker then we need to look a little closer to home to resolve the issue of high pump prices. Instead of looking to OPEC for a solution, our government need to look closer to home for the answer and the best place to start is by re-assessing our current taxation system.”

“In essence, with the current levels of tax placed on fuel, our government are trying to have their cake and eat it too. They hope that the high level of tax un petrol and diesel will push people to using other transport methods as their primary option, but in turn fail to invest adequately in public transport. Punishing those who have no option but to rely on their car to get to work for failures of past government to provide viable public transport alternatives simply cannot be allowed to continue.”

According to the AA, an average motorists who drives 12,000 miles per year (19,200 km) at a fuel consumption rate of 30 miles per gallon (9.42 litres per 100 km) will use 150 litres of fuel per month. At current prices that motorist will pay this €221.40 per month for petrol of which €132.55 is tax. Meanwhile, a motorist driving a diesel powered vehicle will spend €206.70 per month on fuel, of which €113.50 is tax.

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