New laws to cap the price of our rip-off petrol pumps
Getty Images
Petrol stations are to be issued with a maximum price option.
The price of petrol is to be capped as fuel suppliers look set to clamp down on rip-off charges at petrol pumps.
Maxol chief Tom Noonan has told a Dail committee meeting on energy that petrol stations are to be issued with a maximum price option.
The Competition Authority has agreed to give suppliers the option when they update the law on exclusive purchase agreements.
Suppliers had been banned from impinging on petrol retail prices up to now. However, Mr Noonan confirmed "a legal mechanism" to enforce the change still needed to be thrashed out.
The news raises concerns that consumers may not reap the benefit of falling oil prices if filling stations treat the ceiling price as a fixed price.
Representatives from Chevron (Texaco) and Topaz, who attended the meeting, were also questioned about the factors that influence fuel prices.
Increases
Fianna Fail Senator Jim Walsh said there was a public perception that the petrol industry was quick to increase prices when oil charges rose, but slow to bring them down when the price of oil fell.
However, Topaz chief Danny Murray said the belief that a fall in crude oil prices would lead to a direct fall in prices at the pumps was misconceived.
He insisted petrol suppliers were working off refined oil prices, which did not correlate with crude oil prices, and that the recent strengthening of the dollar was also a factor.
All three companies stressed that they were operating in an industry with very low profit margins.
They said the refinery oil cost made up 37pc of the retail price, Government taxes 55pc, transportation and storage just over 7pc and said that profit was less than 1pc.
A recent survey conducted by AA Roadwatch showed that the price of petrol dropped by 1.3c between August and September, while diesel dropped by some 4.3c.
Fuel prices hit an all-time high this summer, and while prices have been dropping, they are doing so slowly.
Generally, it takes four weeks for the increasing prices of oil to be reflected at Irish pumps.
- Caroline Crawford
