The heightened geo-political tensions resulting from Russia’s invasion of Ukraine, and the package of economic sanctions imposed by the West in response, means that we have seen unprecedented increases in prices for crude oil and refined petroleum products (petrol & diesel).
Responding to negative press coverage about increased prices, David Blevings said, “It is important that consumers understand what is happening and realise that these circumstances are not within the control of local fuel retailers.
On the 1st February Brent crude was trading at $89.16/barrel and by 8th March it had risen to $127.98/barrel. In refined product cost terms that meant diesel jumped 76% and unleaded by almost 50% – that’s whey we are seeing diesel more expensive than petrol currently.
There is a misconception that retailers have stock in their tanks from weeks ago that was bought at a ‘cheaper’ price. The reality is most sites across Ireland purchase fuel daily and operate on a previous day market closing price. So, if the market is trading up and closed €0.20cpl higher last night your purchase price for collection at the terminal the following day is up by the same amount. A forecourt operating on a previous day price must pass on these cost increases immediately. Not doing so would be commercial suicide, but this volatility leads to big price differences at the pole sign as we have seen in recent days!
In terms of claims that some stations did not pass on the excise reduction announced by Government on Wednesday, remember that any fuel already in the station’s tanks had paid the duty at the higher rate – businesses can’t simply take a hit of 15cpl & 20cpl on fuel – to do so would mean they were selling the fuel at a loss – not a great business proposition.
No-one likes inflated prices, even retailers and the good news on top of the reduced excise rate is that OPEC has signalled that the cartel may be able to increase production given that many countries are trying to phase out Russian supplies – any increase in production from OPEC and Saudi Arabia is to be welcome and may yet help stabilise the market”, added David.