Belfast Telegraph

Consumers counting the cost as price of fuel and home heating oil surges

By Margaret Canning and PA

Northern Ireland consumers are feeling the effects of increasing oil prices in both home heating oil and fuel.

Motorists are being warned that the period of lower fuel prices is over, after the cost of petrol rose last month for the first time since July 2015.

Experts said the 3.4p per litre (ppl) rise in average pump prices to 105p was a result of oil reaching 40 US dollars a barrel for the first time since early December.

The report by the RAC found that around £1.84 was added to the cost of filling up an average 55-litre car with unleaded.

Diesel forecourt prices increased by 3.7ppl to 105p, despite the wholesale price only rising by 1.5p, according to the motoring organisation's analysis.

The RAC claimed this indicates that retailers are either using the lower diesel wholesale cost to subsidise the price of petrol, or using it as a means of increasing their profit margin.

Seamus Leheny, head of the Freight Transport Association in Northern Ireland, said the level of diesel prices at the pumps was evidence that motorists were being "exploited".

He added: "The wholesale price of petrol is now 4p per litre more than diesel.

"However, both are priced similarly at the pumps, therefore motorists filling up with diesel are subsidising those motorists buying petrol.

"This is an opportunistic move by the retailers to ensure they continue to attract motorists searching for better deals when buying petrol.

"This has a major effect on the transport industry, as all lorries and nearly all vans use diesel."

And he said the gradual climb in prices would increase overheads for haulage firms and ultimately affect the prices of goods for consumers.

But he added: "Many operators don't benefit financially from lower fuel costs, because due to the competitive nature of the transport industry, any savings must be passed on to customers in order to keep their business."

But he said the era of high fuel costs would not necessarily return. "Iran is continuing to increase production, against the wishes of Saudi Arabia and Russia, who wish to freeze world oil production and increase the value of oil.

"Until Iran gets back to pre-sanction oil production, then hopefully we will see oil prices not increase too much.

Simon Williams, fuel spokesman at the RAC, said: "The good times for motorists enjoying lower fuel prices had to come to an end at some point, but unfortunately it's happened with a bit more of a bump than motorists were probably expecting."

He warned that there could be further bad news for motorists, when oil producers meet later this month to discuss limiting their output, although he does not believe prices will reach 60 US dollars a barrel in the short-term.

"It looks as though we are heading towards a new norm of the oil price fluctuating between lower and upper limits of 35 US dollars and 55 US dollars a barrel," he said.

Meanwhile, Aodhan O'Donnell of price comparison website said home heating oil prices were also increasing, in line with crude.

"While the price of home heating oil remains low and competitive, it has been creeping upwards over the last few weeks.

"The average cost to fill a 500 litre tank has increased by almost 3p per litre (11%) since the end of February," he said.

That left the cost of 500 litres at around £145 - up from £130.

And he said we can expect continued price increases in home heating oil.

"This trend is set to continue over the short term as changes in global markets are reflected more quickly in the price of oil and take time to filter through to other fuels - which explains why over the last few weeks we have actually seen a reduction in electricity and natural gas prices."

Belfast Telegraph