Auto advice: Why are petrol and diesel so expensive?

What influences the fluctuation of fuel prices?

Fuel prices can skyrocket due to global economic conditions and geopolitical tensions.

​How do currency exchange rates affect fuel prices?

Oil trades in US dollars, so the strength of the euro against the dollar is crucial. A weaker euro makes oil imports pricier, driving up fuel costs.​

What impact do taxes have on prices at the pump?

Taxes and government policies significantly affect fuel prices, with over half of the pump price comprising taxes.

The key components include excise duty, NORA levy, carbon tax, Better Energy Charge and Vat.

Excise duty is a tax on specific goods such as fuel, alcohol and tobacco. It was temporarily reduced in March 2022 due to the Ukraine conflict.

The NORA levy funds the management of emergency oil stocks by the National Oil Reserves Agency.

Carbon tax is levied per tonne of emitted carbon dioxide, increasing with each budget.

The Better Energy Charge supports energy efficiency and renewable energy projects, while Vat, a 23pc tax on goods and services including fuel, is also a factor.

​Why do fuel prices vary significantly around the country?

Fuel prices differ regionally due to several factors. Competition among retailers usually means lower prices. Rent can vary by region, affecting prices. Local supply-and-demand dynamics can influence prices.

Are we likely to see an increase in fuel prices over the next few months?

Yes, higher fuel prices are likely. The Government will restore full excise duty on fuel in August, adding 4c a litre for petrol and 3c a litre for diesel. The October budget is set to increase the carbon tax further. The future price of oil remains uncertain.

Top Tip: Your driving style can significantly impact fuel consumption. Drive smoothly, avoid harsh acceleration and braking and remove non-essential items from your car to save on fuel.

Got a question? Contact sundaymotors@independent.ie