Drivers facing more misery

Local & National

Monday, March 24, 2008

A litre of diesel could cost Northern Ireland motorists £1.20 from next month, it emerged today.

The bombshell comes as fuel prices - which have soared by over 20% in the last year - hit new record-breaking levels this Easter.

And petrol prices have experienced a hike of 3p - the largest month-on-month increase nation-wide - to 107.5p per litre, which is higher than anywhere in the UK, bar London (107.6p).

Figures from the March AA Fuel report show the cost of diesel - which has risen 5p per litre since February - has now soared to 114.7p on average, making Northern Ireland the third most expensive place of purchase in the UK.

It means drivers are now paying some £9 more to fill their tanks than they were this time last year.

Speaking to the Belfast Telegraph today, Luke Bosdett, a spokesman for the AA public affairs unit, warned drivers to expect further increases over the coming weeks.

"Petrol prices could be heading towards an average of £1.10 per litre by the end of April, with retailers in some rural areas charging as much as £1.15," he said.

"If the price of oil works its way through, diesel could cost around £1.17 per litre on average and I don't think drivers in rural areas should be surprised to come across £1.20."

The figures make stark reading, according to the Consumer Council, which claims that the effects of the credit crunch are taking their toll, via rising energy costs, mortgage debt and grocery bills.

"The blitz on the household budget continues," said a spokesperson.

"Consumers here are paying more at the petrol pumps and at the supermarket. The price of oil and rates continue to rise, yet incomes stay the same.

"This is putting a real strain on many households, especially those on low incomes.

"It is more important than ever for consumers to shop around, compare prices and get the best deal for goods and services."

Noel Smyth, regional manager of the Petrol Retail Association, said that strong demand and tight supplies partly explain the rising cost of crude oil, and he stressed that it was a global problem.

"The demand worldwide for oil is increasing," he said.

"If the refineries get it wrong as to the volumes of fuel they're producing, it puts the price up - particularly as OPEC has decided not to boost supplies."

He added that Northern Ireland is constrained because it doesn't have the critical mass to negotiate its own prices.

"Northern Ireland is only a drop in the bucket," he admitted.

"There's no control here as regards prices. Retailers here have to sell petrol and diesel in accordance with what they might make.

"Unfortunately, retailers are still not making a decent amount on fuel and because crude oil is high at the moment everybody has to increase the price."

He added: "Unfortunately there are more increases in the pipeline that will be feeding through in the next four or five weeks."

Between March 2007 and 2008, diesel prices in Northern Ireland have shot up an astonishing 23% (from 93.6p), while the cost of petrol has rocketed 19% (from 90.2p) during the same 12-month period.

The latest statistics also reflect that prices per litre here have exceeded the UK averages for both, with diesel priced at 0.45p more (than the 114.25p mean) and petrol costing a hefty 0.74p extra (compared with 106.76p).

In real terms, these increases mean that a litre of diesel has become 7.2p more expensive for drivers in Northern Ireland than petrol, compared to just 3.4p in March 2007.

For petrol car owners - who now pay a staggering 17.3p more for every litre than this time last year - it means an increase of £8.65 in the cost of filling up a typical 50-litre petrol tank.

Although the halcyon days of fuel costing less than £1 a litre are almost certainly over, industry experts say motorists can avail of cheaper fuel if they go to supermarkets, where prices are generally lower than in the forecourts of independent retailers.

The March AA Fuel Report shows that the average cost of diesel at Asda (110.84p), Sainsbury (111.65p) and Tesco (111.95p) is at least 2p less than the average regional price of 114.7p per litre.

Likewise, many supermarket giants are offering cheaper petrol than other retailers, whose average price per litre in Northern Ireland works out at 107.5p.

Asda charges around 104.13p, Sainsbury 105.36p and Tesco 106.06p, according to the report.