Householders are facing increases in fuel costs that threaten to add €60 to the cost of a tank of home heating oil, suppliers warned yesterday.
Sharp increases in oil prices, which saw crude hit highs of $96 a barrel last week, are driving up the cost of motor fuel and home heating oil.
Danny Murray, chief executive of Topaz Energy, the company that operates Shell and Statoil franchises in the Republic, predicted yesterday that petrol could increase by as much as five cent a litre, while home heating oil could go up by between four and six cent a litre.
A five-cent rise in motor fuel would add €2 to the cost of filling the average tank. The cost per litre would increase to €1.20 from €1.15.
Maxol Ireland confirmed yesterday that it increased its wholesale prices by 2.68 cent a litre for petrol. VAT will bring this to over three cent.
It normally reviews its prices on Wednesdays, but chief executive Tom Noonan said recent oil price increases forced it to take what he described as yesterday's "unprecedented" step. "We will be reviewing it on a daily basis while the current volatility in the market continues."
A jump of between four and six cent would increase the cost of a tank of home heating oil by €40 to €60.
Mr Murray pointed out that operations such as Topaz have their prices determined by the cost of refined petroleum products on world markets.
These have increased by over 70 per cent since the start of the year. "For example, unleaded gasoline cost $500 a tonne on world markets in January, it now costs $860, that's an increase of 72 per cent," he said last night.
Mr Murray added that the strength of the euro against the dollar had mitigated some of the impact of oil price increases for Europeans.
If the dollar had remained unchanged, Topaz believes that motorists would be paying up to 7.5 cent a litre more for petrol.
Since last Thursday, a government levy designed to cover the cost of maintaining strategically-important national oil reserves doubled to one cent a litre. This cost is passed on to consumers.
Mr Noonan yesterday blamed speculators on world oil markets for much of the current volatility.
"They have moved away from equities because of the recent problems with banks, and have moved into commodities.
"Oil is one of the more obvious commodities. There is actually nothing wrong with the underlying supply and demand picture, so a lot of this is down to speculation."
Hedge funds have been blamed for fuelling some of the recent oil price increases in world markets.
Yesterday, Platts' energy information service said crude oil was trading at $92.03 a barrel in New York.
