Irish motorists warned of potential increase in fuel prices amid war in Middle East

Irish motorists have been warned of a potential increase in fuel prices amid the outbreak of war in the Middle East.

Professor Aoife Foley, who is the Chair in Net Zero Infrastructure at the University of Manchester, has outlined what impact the conflict could have on energy prices.

Professor Foley estimates that if oil markets spike sharply, the price of petrol could rise by €0.70 per litre.

However, that would only be in the case of what she describes as a “severe shock”. In the case of a more moderate shock, the price could rise by €0.29 per litre.

In the case of diesel, a severe shock to oil markets could result in a price increase of €0.81 per litre.

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This figure stands at €0.34 per litre in the case of a more moderate shock.

Elsewhere, for households who use heating oil, the price of a refill could almost double.

With a current baseline of €0.99 per litre, this could rise to as much as €1.95 a litre in the case of a severe shock.

Professor Foley has warned that electricity prices could also increase as a result of the conflict.

She stated: “If liquefied natural gas markets tighten and Asian competes more aggressively with Europe for cargoes, both countries [Ireland & UK] would see further upward pressure on electricity prices.

“It is also important to remember that oil and gas are priced in US dollars. If the dollar strengthens at the same time as oil rises, the impact is amplified for both the euro and sterling.

“A weaker euro or pound against the dollar would mean higher pump and heating costs even before VAT and excise are applied.”

She went on to compare the potential impact on Irish households, as opposed to their UK counterparts.

“Irish households would likely feel a larger percentage impact because of higher VAT, a smaller and more import exposed system, and euro exposure to dollar priced fuels.

“UK motorists would see large visible increases because of the high fixed fuel duty built into pump prices.

“Industrial users in both countries would be hit hardest through gas price spikes, particularly if global liquefied natural gas markets tighten.”

Professor Foley concluded by saying that the war in the Middle East was not just a geopolitical issue, highlighting the potential impact on Irish consumers.

She added that people’s transport costs, home heating and electricity bills could all be affected.