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Saturday 19 October 2019

Price of fuel 'to rise by 3-4 cent' over Saudi drone strike

Expect prices to rise at pumps
Expect prices to rise at pumps

The price of petrol and diesel at Irish pumps is set to rise 3-4c per litre from as early as this weekend, the head of forecourt chain Applegreen has warned.

World oil prices shot up this week after a drone attack on Saudi Arabia's biggest refinery.

The effect on prices will be swift and likely to be sustained for some time, Applegreen's chief executive Bob Etchingham said.

The weakness of sterling was already putting pressure on the cost of oil - traded internationally in dollars.

"You will start to see increases at the pump from this weekend onwards," he said.

On Monday, the price of Brent crude oil posted its biggest one-day gain since the 1990-1991 Gulf crisis after the Saudi drone strikes caused the single worst disruption to supply ever.

The attacks highlight the vulnerability of the world's most important exporter and are expected to see oil prices remain elevated.

AA Ireland has warned diesel and petrol prices for drivers could rise by between 6c and 8c per litre, if the high crude prices are sustained.

Applegreen stunned the markets with the strength of its financial results yesterday - enough to send shares surging almost 10pc to €5.68 each.

The Irish company now operates here, in the UK and across four different markets in the US. Revenue across the group increased by 73pc to €1.48bn in the first half of 2019 compared to the same period a year earlier. Gross profits in the period were up 145pc to €268m.

Earlier this week, director of consumer affairs with AA Ireland Conor Faughnan warned motorists to expect a "chunky" rise in prices at the pumps if crude prices remain high.

Hard

"If the high crude prices are sustained at current levels we will definitely feel it in four to five weeks' time," he said.

"It will hit us quite hard. It will be chunky, with rises of between 6c and 8c per litre likely at the pumps."

He pointed out that the exchange rate between the dollar and the euro also affected prices for drivers.

Mr Faughnan said 62pc of the cost of a litre of petrol is accounted for by Government taxes, and 57pc of the cost of a litre of diesel.

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