The average price of a litre of petrol has slipped to 121.9c, a 5 cent drop in comparison to last month according to the AA’s National Fuel Price Index. Diesel prices have also tumbled, dropping by a further 7 cent to 105.4c.
According to The AA, motorists will continue to see pump prices trend downwards in 2016 with the energy commodity heading towards its lowest mark since 2009. The month of December during that year saw motorists hand over 122.4c per litre of petrol, while diesel has not been this cheap since October 2009 when it clocked in at 105.3.
“These are chunky falls this month which is obviously good for us as drivers," says Director of Consumer Affairs Conor Faughnan. “We don’t know when we are going to run out of road in terms of price falls but for now oil remains fairly weak on international markets. As we emerge from winter in the northern hemisphere we tend to see Diesel drop in price relatively, so it's not a huge surprise to see that seasonal trend emerge. Diesel is very similar to heating oil so demand falls a bit in the spring.”
Oil prices have seen a dramatic fall since the middle of last year when it was holding above US$100 per barrel. The price for a barrel of crude oil slipped to US$27 last month – the lowest in 23 years – in a sign that pump prices will continue to fall in the short term. Compounding this is scepticism surrounding a possible production freeze between global oil producers, with Iran recently voicing their disapproval of the proposal. The price of petrol has declined 20 percent since February 2014. Diesel has dropped by 28 percent within the same time frame.
“We can’t do a lot about world prices, we just have to take the rough with the smooth," says Conor. “We do control our own taxes, though. A litre of either fuel actually only costs 30-40 cent. The reason why we pay so much at the pumps is Irish tax. This is a point that the AA expects to be making to the incoming government in the near future.”