Rocketing fuel prices are putting the Government under severe pressure not to reverse recent fuel duty cuts.
The cuts, which shaved 32c off a litre of diesel and 27c off petrol, were brought in after mass protests by farmers and hauliers shut the capital and caused traffic chaos around the country in April. But fuel prices are spiking again as Iran has restricted traffic through the Strait of Hormuz.
A phased restoration of duties, set to begin on September 1, would send both diesel and petrol to well above €2 a litre, the price which sparked the protests.
Diesel prices have risen to an average of €1.92 per litre this month, up 19c from July’s average of €1.73 per litre, an increase of 11%. Petrol prices are up to an average of €1.84 per litre, a jump of 9c from July’s average of €1.75 per litre, an increase of 5%, according to AA Ireland’s latest fuel price survey.
However, despite the high prices many garages are losing money on pump sales and only make a profit from motorists buying a ‘breakfast roll or the sliced pan or the Mars bar or the coffee’, said Fuels for Ireland chief executive Kevin McPartlan.
The increases reflect wholesale market movements, as excise duty was unchanged during August.
The organisers of the fuel protests in April are mobilising again, according to Mr McPartlan, who represents the major petrol retailers.
He said: ‘We are highlighting it to Government and we are warning that we could very well freefall into a situation where the prices that Irish motorists are being asked to pay for their fuel will be significantly higher than the prices that brought those people out onto the streets.
‘I’m not saying that to be threatening. We definitely did not support the tactics that were employed by the protesters, we felt they were very, very damaging.’
However he warned that if ‘fuel prices of €2.20 brought people onto the streets then fuel prices of €2.30 is likely to have the same effect’.
Petrol stations are often selling fuel at a loss as the profit margin on petrol and diesel sales is ‘very small’, he said.
Aontú leader Peadar Tóibín said that if excise hikes are not stopped, ‘people will take to the streets again’.
The Government VAT take on fuel this year is expected to be €1.67billion because of rising energy prices. Mr Tóibín said: ‘Due to the rise in petrol prices, the Government is taking record VAT, despite the fact we are in a cost-of-living crisis. They’re benefiting while the customer takes the hit. This is wrong and it’s unfair.’
A Department of Finance spokesman said the Government’s support package, now totalling over €1billion, was helping to reduce the burden at the pump and protect those most at risk of energy poverty, adding: ‘The situation remains fluid, and there will no doubt be further ebbs and flows before a new equilibrium is reached in global oil markets.’
