Petrol and diesel prices have fallen to their lowest level since September 2021, but the end of reduced excise duty will cause prices to climb again, according to AA Ireland.
Last March, then Minister for Finance Paschal Donohoe announced a temporary reduction in excise duties on petrol, diesel and marked gas oil as a result of the price rise following the Russian invasion of Ukraine.
Under the change, excise duty was reduced by 20 cent per litre of petrol and 15 cent per litre of diesel. There was also a reduction of 2 cent in the excise duty charged on marked gas oil. These reductions were due to remain in place until August 31st 2022 but were extended until May 2023 due to the continued impact the war was having on fuel prices.
However, in February it was announced there would be a phased return of excise duty over the summer months.
According to the latest AA fuel prices survey, fuel prices have fallen to the lowest since before the start of the war in Ukraine.
The average petrol price across the state is €1.59, the lowest since September 2021. Diesel fuel has dropped significantly, with the average at €1.51, 9 per cent less than last month.
“We have not seen prices this low for petrol and diesel since September 2021, well before the start of the ongoing conflict in Ukraine, which led to a dramatic increase in fuel prices internationally,” said Paddy Comyn, AA Ireland’s head of communications.
However, these prices are unlikely to last as a phased restoration of previously reduced rates of excise on petrol and diesel will take place in three stages over the coming months.
This reintroduction of duty will see rates restored on June 1st by 6 cents per litre of petrol and 5 cents per litre of diesel. On September 1st, these rates will increase by 7 cents for petrol and 5 cents for diesel.
The Government will fully restore the rates on October 31st with a final increase of 8 cents for petrol and 6 cents for diesel.
“Motorists won’t be able to enjoy these prices for too long, however. We already know that unless prices fall again, then petrol will be back up to around €1.80 per litre and diesel to €1.76 per litre by the end of October. Which were the same as at the start of the Ukraine conflict,” adds Comyn.
Meanwhile, electric vehicle (EV) drivers are paying almost identical amounts this month as electricity prices remain elevated. The average EV driver is paying €1,131.04 to charge their car over the course of the year, down from €1,138.13 in the previous month, according to AA Ireland.
However, those that are taking advantage of smart meters and cheap night rates are paying as little as €421.43 to cover the same 17,000km distance. Those that are charging exclusively on public chargers could be paying up to €2,150.27 per year.
With wholesale gas prices falling in recent months, EV drivers await a corresponding drop in electricity prices, AA Ireland said, adding that continued volatility in global markets and more long-term hedging mean these prices may take some time to pass on.