Petrol is being sold at a loss in Donegal because of the ‘significant’ difference in price between the North and south, Fuels for Ireland has claimed.
As excise duty is set at different rates in Dublin and London, the cost of filling up has fluctuated on both sides of the border many times over the years.
On Newstalk Breakfast this morning, Fuels for Ireland CEO Kevin McPartlan said drivers in the North are currently paying far cheaper prices – and recent budget choices mean the gap is set to widen further in the next few months.
“The average price of petrol in Northern Ireland is about 10c a litre cheaper than it is here in the Republic,” Fuels for Ireland CEO Kevin McPartlan told Newstalk Breakfast.
“Then you have the situation in the Budget in the UK, a few days ago, the Chancellor of the Exchequer announced he was going to have a further extension of excise duty cut.”
Mr McPartlan said the result is many drivers make an active choice to fill up in Northern Ireland, rather than at their local petrol station in the Republic.
“What you’re talking about is a differential of about 20c per litre in the cost of petrol, north and south of the border, and about 15c in terms of diesel,” he said.
“That’s driving people across the border to buy their fuel.”
A man holding refueling nozzle.Excise duty in the Republic was cut two years ago, as the invasion of Ukraine sent the price of fossil fuels surging.
The Government initially planned to fully reverse the cuts last October; however, in the budget, it postponed the plan until this year.
It means prices are due to increase on April 1st and August 1st – eventually adding 8c a litre to the price of petrol and 6c a litre to diesel.
By contrast, British Chancellor Jeremy Hunt announced a 5p cut in petrol duty, introduced in 2022, would remain in place for a further 12 months.
It is the 14th consecutive year that the British Government has not increased fuel duty.
“It’s a very long time since we had such a significant differential,” Mr McPartlan said.
“Already, we did a survey on Wednesday and we found that service stations right on the border are trying to match the Northern Irish price.
“Even in today’s Irish Independent…. a retailer in Donegal, he says he’s selling fuel at a loss in order to drive people into his convenience store so he can sell his groceries and newspapers and things - whatever else.
“This is a problem we know is going to be embedded for 12 months because the Chancellor of the Exchequer said, ‘This is a 12-month extension.’
“Those border county service operators can’t maintain that for that period of time.”
Long-term, the difference will become less of a problem as electric cars replace petrol and diesel vehicles.
Main image: A man filling his car at a petrol pump. Image: Sam Boal/RollingNews
