As the price of crude oil continues to collapse on international markets, experts said more retailers will lower their prices.
John Lowe, The Money Doctor, notes that diesel has fallen to less than €1 a litre on some forecourts, with petrol under €1.20. Queues have formed at filling stations offering these discount prices, mainly in Mayo and the North-West.
But some forecourts are maintaining prices at high levels, prompting motoring body AA Ireland to complain that pump prices are falling too slowly. Further falls in petrol and diesel prices are on the way.
This follows crude oil falling to a 12-year low of less than $30 a barrel on international markets ( Brent Crude ) Reductions at the pumps have not been bigger, partly because 60pc of the price of petrol and diesel is swallowed up by government taxes, most of which are charged at a flat rate not related to the wholesale price of the fuel.
Petrol Retailers’ Association spokesman David Blevings said prices could further fall by between 5c and 10c a litre for both fuels. “We could see 5c to 10c coming off the price if crude prices continue to fall and this is passed on in the market. The profit margin for petrol retailers is very low because so much of the price at the pumps goes to government duty, carbon tax and VAT. The recent reductions in crude oil prices will work their way into refined product prices and retail prices in the next week”
Prices have fallen by 30pc since the end of 2013it is estimated that low fuel prices could be here for at least three years.
International investment bank Goldman Sachs has issued warnings that the price per barrel will probably continue to fall and may even reach closer to $20, with some analysts predicting it might even go as low as $10. The average price of a litre of petrol is now 125.9c, with diesel at 114.9c across the country, according to Pumps.ie.
This time last year, motorists reported paying as little as 122.8c per litre of petrol and 117.8c for diesel. Oil prices fell again yesterday after a rise in weekly US crude inventories fed into bearish sentiment about the deepening global supply glut that has brought prices close to levels not seen since 2003. Analysts at Morgan Stanley warned that a rise in demand for crude could be lower than previously expected. “Any slowing in the rate of demand growth could delay the timing of rebalancing and ultimately a price recovery,” they said in a research note.