Gasoline and diesel prices remained stable last month, but the next few weeks may cause fuel prices to rise again.
Experts said that the situation in the Middle East has now made oil markets nervous.
Hamas’s attack on Israel and subsequent Israeli military operations in the Gaza Strip have increased fears of the outbreak of a broader Middle East conflict.
Crude oil prices rose from $84 on the eve of the Hamas attack to $90 yesterday.
An escalation of the conflict in the Middle East could send Brent crude above $97 a barrel, according to Justin Doyle of specialist bank Investec in Dublin.
“We can expect Brent to rise sharply on any upturn, surpassing last week’s high. Following this, we will look at the high of $97.58 per barrel at the end of last month. On the downside, further de-escalation could push Brent below $90,” Mr. Doyle wrote in an investor note.
Some international analysts predict that crude oil will rise above $100 per barrel.
The latest AA Ireland research shows prices have been relatively stable this month despite the introduction of a higher carbon tax in the Budget and volatility in crude oil prices.
However, AA Ireland’s Blake Boland said the political situation in the Middle East remained unstable and markets were concerned about the impact this could have on prices during the winter months.
“The price of crude oil rose from about $70 a barrel in the summer months to about $90 a barrel,” Mr. Boland said. “Moreover, the political situation in the Middle East remains unstable and markets are worried about the impact on pricing as we head into winter.”
The latest AA Ireland monthly fuel price survey shows a slight decline in petrol and diesel prices over the last four weeks. Gasoline fell to 1.83 euros from 1.85 euros in September, and diesel fell by 1 cent from 1.85 euros to 1.84 euros per liter.
This contrasts with September, when the price of gasoline increased by 15 cents and the price of diesel increased by 21 cents.
The government’s move to delay another increase in excise duty has stopped prices reaching €2 per liter this month.
Prices increased in September, largely due to the second tranche of excise tax restorations and the increase in the wholesale cost of petrol and diesel.
Although prices have fallen slightly towards this month, they still remain high from May this year, when diesel cost an average of €1.47 per liter.
In the budget, the last increase in SCT on gasoline and diesel was postponed to next year.
The government reduced the special consumption tax on fuel by 20 cents in March last year in response to the increase in pump prices due to Russia’s invasion of Ukraine and general fuel shortages.
In June the Government increased the tax on gasoline by 6 cents and on diesel by 5 cents; Additional increases were applied in September.
The final reversal would occur on October 31, when prices would increase by 8 cents on gasoline and 6 cents on diesel.
However, these have now been postponed.
Mr Boland said the market was still unstable and changes to taxes and duties were also affecting prices. The last Budget increased the carbon tax from €48.50 to €56 per tonne emitted. This added as much as 3 cents per liter to gasoline and diesel.
“However, the decline in wholesale prices negated the impact of the taxes,” he added.
