‘The government need to act’ on fuel prices – retailer

When news of the US/Israel attack on Iran made it to Padraic Rudden’s news feed, he knew it meant one thing locally; fuel price increases.

The Cavan business man sells motor fuel at three locations across Cavan Town, and he predicts diesel prices could increase to “at least” €2.10 per litre by the weekend.

“You hate doing it but what can you do? People are in bad humour looking at it but there’s nothing you can do because you’re not making any money,” he says.

On Saturday, February 28, a fill of diesel set the motorist back €1.729 a litre, while the unleaded label showed a figure of €1.709 at Rudden’s service stations. As he predicted, the price on the forecourts had increased two days later.

By Tuesday afternoon, diesel had risen to 204.9c/l; while unleaded petrol was selling for 185.9c/l.

That, Padraic said, was leaving Rudden’s with a profit of just under two-cent per litre. In normal times, they would make 5/5.5 cents profit per litre. “Would anybody else work for two cents on two euro?” he asked.

“When fuel is gone up, retailers lose their margin completely... the only people that’s gouging is the government,” he claims.

Fuel is priced daily, so when Padraic purchased fuel, which was four cents more expensive a litre on Tuesday morning, the red digits on the fuel labels in front of his shop will reflect this increase either tomorrow or Friday.

“What we get in today [Monday] we were priced on Friday, and what we get in tomorrow is priced today. Today’s price including VAT is costing us 203.1c for diesel,” he reveals.

“When a boat docks at Dublin port, you don’t pay the price it was before it left, you pay the price it is when they pump it in. All these fuel people that are storing fuel at the port, they only have about four or five days’ capacity.”

The “hateful” aspect of the price increase for Padraic is that “out of every ten cents it goes up, the government gets six and a half cent of it.”

“If the government held back on their end of it, it would only be gone up by ten cent,” he claims.

“It’s gone up by thirty cents, but twenty cents of that is taxes and duty.”

Padraic believes the government should revert back to the tax and excise expense present before the war began.

“The money they were making before the war started should be enough for them. What’s happening now is the government are making more money all the time, the retailer is getting no profit and the end user is paying thirty cents more. The people that are making a killing here are the state because the state now is making an extra twenty cent on every litre of fuel sold more than they were making two weeks ago.”

He says most retailers are actually making less because they don’t want to pass the full increase on to their customers.

“We’re trying to keep it as low as we can for as long as we can,” he says, adding that “to be fair” none of his customers have commented on the price of fuel, however he knows it’s hitting pockets.

He claims the state could reduce the cost of fuel by twenty cents “tomorrow” and “still be making as much money as they made on fuel two weeks ago”.

Meanwhile, Ray Cole, Managing Director of Virginia International Logistics also says “the government need to act”.

Virginia Logistics charge a fuel surcharge to their customers monthly, which they have now moved to weekly due to the current situation.

“We wouldn’t be able to hold the fuel for a month,” he reasons, acknowledging that it will be “tough” for customers to pay. He also says there is a probability they will “lose business”.

“Business will drop because people will stop moving stuff for a short period to see will fuel come back down.”

The price hike sets them back “thousands and thousands” however he adds: “What we have to do is pass it on to our customer.”

The company purchases in the region of in 70,000 litres of fuel per week, which includes their trucks in the UK and mainland Europe who refuel using a fuel card on the forecourts.

“It’s a massive increase for us and we’re just going through all our customers at the moment and letting them know that there will be a very big increase in their fuel surcharge.

“There’s nothing we can do about it,” he says, adding: “We can’t function without it.”

A member of the Irish Road Haulage Association, he too believes there is “plenty of room” for the government to “drop excise and VAT”.

While fuel prices increased when the war started in Ukraine, the managing director believes this is a “small bit different” with the closure of the Strait of Hormuz, a key waterway, meaning vessels carrying oil and gas are effectively blocked.

If the war continues, he predicts a “shortage” of fuel in the future.