Petrol and diesel prices reach their highest level so far this year

Fuel prices have hit their highest level so far this year, according to the latest price survey from AA Roadwatch.

Petrol prices rose to €1.81 a litre in April while diesel prices rose to €1.78 a litre.

Petrol prices are now up by almost 13 cent since January, while diesel prices have risen by 9 cent.

And it looks like things could get worse for motorists over the coming months. 

So why are prices going up, how bad could it get, and what can motorists do? 

Increasing prices at the pump

Fuel prices are increasing for three main reasons: the restoration of Government excise duty cuts, wider geopolitical concerns, and a relatively weak euro.  

Back in March 2022 the Government slashed the excise duty on petrol by 20 cent and on diesel by 15 cent as part of a series of cost-of-living measures to help consumers deal with rapidly rising inflation.

However the cuts weren’t permanent and over the past few months the Government has been gradually restoring excise duty to its previous level, leading to an increase in prices at the pump.

At the start of the month, 4 cent was added to a litre of petrol and 3 cent to a litre of diesel as the Government partly restored the excise cut. However once VAT is included, prices at the pump went up by around 5 cent a litre for petrol and 4 cent for diesel.  

There will be a similar rise at the start of August when the last phase of the restoration is applied. 

And in October around another 3 cent will be added to a litre of petrol and diesel as yet another increase in the carbon tax kicks in.        

On top of this, the price of oil has also been increasing on the back of rising tensions in the Middle East. Though perhaps not as much as one might have expected given the increasingly fraught international landscape.

At the start of the year, oil was trading at around $75 a barrel. It rose to over $90 at the start of April but has since eased back a bit. But it’s still around 15% higher than it was a few months ago and this is also feeding through into higher prices for motorists. Nevertheless prices are still well below the $122 that was reached in mid 2022 following the outbreak of war in Ukraine.      

But any further escalation of global conflict could see the price of oil shoot past the $100 mark again which would be bad news for fuel prices.    

On top of all this, the value of the euro against the dollar has been relatively weak. 

Oil is bought and sold on international markets in dollars so any fall in the value of the euro also leads to higher fuel prices.

How bad will it get?  

Taxation measures alone will add around 8 or 9 cent to a litre of petrol and diesel over the coming months. 

This will bring prices close to the €1.90 a litre mark.

However if the price of oil approaches the $100 mark then motorists are easily looking at prices approaching €2 a litre again.   

What can I do?

The advice at bonkers.ie is usually to shop around. But shopping around for fuel often isn’t worth your while as any savings you make at the pump might be negated by the cost of having to drive miles to a forecourt on the other side of town.    

Instead, driving better to conserve fuel is a better option.

Here are some tips: 

• Drive consistently - driving more consistently rather than accelerating and decelerating aggressively within short periods of time can help you save on fuel consumption. 
• Keep your tyres properly inflated - having low tyre pressure increases drag. Therefore, if your car’s tyres need considerable pumping, not only is this dangerous, it will also decrease your fuel economy. 
• Clean out your car - extra weight decreases your car’s fuel economy. So get rid of everything bar the bare essentials.
• Improve gear changes - according to Aviva Ireland, driving more efficiently, correct use of gears, and changing up into a higher gear as soon as conditions allow can save you up to 15% off your fuel bill.
• Know when to use air con or windows - the use of air con is a big factor in how much fuel you use. So try cool down using an open window instead. However, having a window down can cause considerable drag, especially the faster you’re travelling. So as a general rule of thumb, use your AC when you're driving at high speeds and open the windows at lower speeds.

Check out our guide for more information on how to save on your driving costs. 

Get cheaper car insurance 

You may not be able to save much on your fuel costs. But you can certainly save on your car insurance 

Check out this article for simple ways to reduce your insurance costs.  

And remember we recently launched our new car insurance service at bonkers.ie. You can now get a discounted, direct quote from insurers and be covered in just a few minutes.

It’s quick and easy to get a quote and it can all be carried out online. And best of all, our service is completely free!