Petrol could reach €1.70 per litre, says AA

Families facing back to school costs are set to be dealt another bitter blow according to AA Ireland who have indicated that the price of both petrol and diesel could surge by as much as 7 cent per litre within the next week or two. The unwelcome news means that motorists could be paying as much as €1.70 per litre of petrol and €1.60 per litre of diesel within weeks. This would pass the record of €1.659 set last May and would be the highest price that Irish motorists have ever paid. This would also make petrol 20 cent more expensive on average and diesel 18 cent more expensive than September 2011.  “It has been the year from hell for fuel prices” explains Conor Faughnan, Director of Consumer Affairs, AA Ireland.  “Our monthly survey for August showed that petrol is averaging 163.1 cent, diesel 154 cent. This is almost as high as the record prices that we were paying in May and the bad news is that it is set to get worse.  We are expecting significant price increases to come through over the next week or so that could even push petrol up to €1.70 per litre.” The AA continues to receive a large volume of complaints from motorists about high prices.  “We are continually asked what is causing it.” Says Faughnan. “There are three distinct reasons. Firstly, there is the rise in oil prices. This fell back a bit during May and June but has turned upwards again. Secondly, there is the value of the Euro which is down by 16.5% since this time last year*.” “But let’s not forget that the biggest reason is Irish taxes. Since October 2008 successive tax increases have added 20 cent per litre to both fuel. We are feeling the full pain of that now, which is hitting family budgets and damaging the economy. Some 57% of the retail price of petrol is tax and that must come down.” Based on the current average price of petrol of €1.631 per litre, it currently costs a family driving a saloon car with a typical 55 litre tank €87.70 to fill it up.  That could rise to €93.50 in the next week or two. “As prices rise, so too does the level of income the government is generating through VAT.” Says Faughnan “They have the ability to loosen their stranglehold on motors and businesses who are struggling desperately with the cost of fuel and we implore them to take action and overhaul of their fuels taxation policies for Budget 2013.” *Source – European Central Bank