The continuing rise of the euro against the dollar and the end of the war iIraq have helped bring about an aggressive decline in the price of crude oil in the eurozone. Ian Noctor reports.
A barrel of crude oil has dropped by in or around $9 from a peak of $34.55 the day before US troops stormed Baghdad. As a result of the fall, prices at the pumps are the cheapest they've been for over six months.
But the huge drops experienced at the wholesale end have not been passed on in full to motorists.
The average price in Ireland of a litre of unleaded at the height of the Iraqi crisis was 92c. It's now 89.2. That represents a reduction of just over 3 per cent for the motorist, a far cry from the 26 per cent drop in crude oil prices enjoyed by the suppliers.
Friends First chief economist Jim Power says this can be partially explained by the fact that oil companies buy forward: "In other words the petrol they're selling us now, they bought at the higher rate three months ago."
As a result Jim Power expects to see a further significant drop in prices at the pumps over the coming months. "I think a 4 or 5 per cent drop in prices is not unreasonable if OPEC manages to keep prices within their preferred range of $23 to $26 dollars a barrel."
Motorists living close to Northern Ireland are paying the most per litre in the Republic for unleaded fuel. With a litre of unleaded costing as much as €1.17 in Northern Ireland, many petrol stations on this side of the Border are charging way above the average and are getting away with it. According to Declan Holmes of IrishFuelPrices.com, the most expensive petrol in the republic is for sale at the Maxol Station in Ballyjamesduff, Co Cavan, at 97.9c per litre of unleaded.
At the other end of the scale, the cheapest unleaded in the country can be bought at Statoil's garage on the Youghal Road in Killeagh, Co Cork, which is charging 79.9c per litre for unleaded and 71.9c for diesel.
At 18c a litre between the most expensive and the least expensive, motorists filling an average 50-litre tank are paying a difference of €9 a fill or about €270 a year for a motorist who clocks up 12,000 miles per year.
Retail petrol prices are set by the garages, not by the companies which supply them. Statoil spokeswoman Martina Byrne says oil companies can recommend prices for the outlets which buy their products, but by law they cannot set the price.
"Once upon a time the Government set the price and oil companies made their margin, but then to promote competition and lower prices the Government abolished that system," she says.
Byrne says that, because of the level of competition, independent garages are selling fuel at under their recommended retail price in a bid to channel business from the pumps into the shop.
However, explaining how he can sell petrol and diesel at such low prices, Killeagh Service Station's owner and manager, JJ Fennelly, says it's all a matter of volumes. "I'd prefer to be making a 3 per cent margin on €20, than a 7 per cent margin on nothing," he says.
"Three years ago we would have been about half way up the league table in prices, now we're cheapest and the business is flying."
Fennelly says his supplier gives him advance warning of impending rises or falls in prices. Because of the volume of fuel he sells he can plan stock levels to take advantage of the fluctuations.
If the prices are about to rise he fills his forecourt tanks to the brim. If prices are about to fall he holds off. The cuts can then be passed on to the customer. "Last Sunday an English man on his way back to Rosslare said not only were we the cheapest petrol in Ireland but he reckoned we're the cheapest in the eurozone!"
The Automobile Association, which surveys prices across Europe on a fortnightly basis, would show JJ's English customer to be a little off the money. Luxembourg at 74c for a litre of unleaded is the cheapest in the 12 countries which use the euro, while Finland is the most expensive at €1.13. Ireland is fourth cheapest with the average litre costing 90c.
Luxembourg also comes in cheapest for diesel charging just 62c per litre. Germany is dearest at 89c per litre, while Ireland is seventh of the 12 at an average of 83c per litre.
According to Irishfuelprices.com, Dublin drivers are on average being charged more than their counterparts in Cork and Limerick to fill their tanks. However, according to the site which continually monitors prices across the country, there are one or two exceptions to the rule.
At 94.9c per litre the Shell Service Station on the Enniskerry Road in Kiltiernan is the most expensive in Dublin. The cheapest is at the Texaco station at the Kimmage Cross Roads where a litre of 95 octane unleaded costs 80.9c.
That price is matched by the neighbouring Maxol garage at Melia's on the Harold's Cross Road.
If you're running a diesel car, then the independently-owned Lee Garage on the Model Farm Road, Cork, has the cheapest reported litre at 73.5c. It also sells its unleaded for 80.9c per litre, making it the cheapest fuel stop in the country.
If you live in the west, the best-priced litre of diesel is available at the Esso Garage on the Castlebar Road in Claremorris, Co Mayo at 73.9c.