Northern Ireland still paying UK's highest fuel prices... and it'll get worse
Northern Ireland’s motorists have started the new year by paying more for petrol and diesel than anywhere else in the UK.
The AA Fuel January fuel price report reveals that drivers here are forking out, on average, 134.6p per litre for petrol and 142.8p for diesel.
By comparison, the study shows UK forecourts are charging averages of 133.5p and 141.9p respectively.
Drivers across the province are used to spending more on fuel than their UK counterparts due to lack of meaningful competition in the local market.
AA experts attribute this discrepancy to Northern Ireland’s lack of Asda forecourts, as the supermarket helps drive down prices in England.
Watchdog president Edmund King said he believes that the cost of fuel will be subject to fluctuations throughout 2012 for various reasons.
“The AA thinks that, with continued instability in the Middle East and other oil-producing regions, drivers should be prepared for short-term price surges this year,” he said.
“These could be softened by the effect of the eurozone’s continuing financial traumas, but last year’s regular oil price swings look set to continue.
“Additionally, a stronger dollar has weakened the pound’s value in oil and fuel markets and european refinery closures cast a shadow on diesel supply and prices,” he added.
Overall, a weak euro has pushed pump prices across the EU to record levels, US gasoline demand is back to 2003 levels, UK petrol sales are down 15% on 2008 and hedge funds lost more than 4% last year, according to the AA. “The big question for 2012 may be not how high the price of fuel will go, but to what extent the consumer can afford it,” said Mr King. “The Treasury needs to consider the adverse effects high fuel prices are having and should now think about extending the freeze on fuel duty until the economy recovers.”
The average petrol price was 128.14p in 2011, while it cost 111.8p the previous year.
Similarly, diesel cost on average 132.53p a year ago, and was priced at 111.91p a litre in 2010.
The AA has said that a 7% rise in the European wholesale price of petrol and a weaker pound in early January points to a further 1p rise.
If that happens, a 2p increase this month will add a further £4.25 to the monthly (£51 yearly) cost of a family with two petrol cars.
Last month’s fall in the inflation rate to 4.2% was in part due to a halfpenny fall in the price of petrol and diesel in December.
However, it masks the fact that petrol prices are around 20p a litre and diesel 30p a litre higher than in 2010, with wage rises failing to keep pace.
Meanwhile, home heating oil prices are fast approaching last April’s prices — which represents their highest level over the past three years.
The cost of 900 litres is currently sitting at £550, which works out at around 61p a litre and is only a penny cheaper than its peak price.
“The current three-year high is £560 for 900 litres and we could see a return to that level any day now,” said a spokesman for cheapestoil.co.uk, the comparison website.
“What is happening elsewhere in the world can have an effect on prices here.
“A current concern is over Iran and its recent threat to block the Strait of Hormuz, which would choke off some of the world's oil supply.”
Local distributors have said they are having a winter that was much quieter than expected, the spokesman added.
The website was quoting prices between £530 and £559 for 900 litres from various suppliers in Northern Ireland.
The Republic — which has a higher rate of tax on heating oil, as well as a CO2 tax that is also set to increase — could see home heating oil prices rise to €1 a litre (83p).