Mr. Tom McIlduff:

I will be as quick as I can. I thank the committee for giving us the opportunity to speak today. The AA is Ireland's motoring organisation It has acted as a voice for motoring interests and in a leading role supporting road and transport policies for more than 100 years. We have also grown to become one of Ireland's largest personal lines insurance intermediaries in Ireland, providing motor, home and travel insurance.

The rising cost of fuel is one of the most important issues for the motorist today. The AA fuel prices survey, which the business has done since 1991, has been followed in that time by many consumers and customers. Our AA fuel website page is one of the most visited on the site, with in excess of 30,000 visitors over the past month, an increase of 500% compared with the previous month.

This survey has shown that average fuel prices are rising steadily, and as the committee knows, we have had record prices several times in the past few weeks. The average price for fuel in Ireland currently stands at €1.84 per litre for petrol and €1.90 per litre for diesel. That is 62 cent per litre more than in 2020 for petrol and 70 cent per litre more than in 2020 for diesel. There has been considerable media attention in recent weeks as the price passed €2 per litre, although that price subsided, in part due to the relief in duties and the settling in oil prices internationally.

As I am sure members of the petrol industry will illustrate, the oil market is very volatile and changeable now, and that is something out of the control of our Government. The reality is that the price that Irish consumers will pay is determined largely by global supply and demand economics.

We have seen high oil prices before and back in July 2008, Brent crude oil reached a record just over $147 per barrel but 14 years ago the price of fuel was €1.17 per litre for petrol and €1.09 per litre for diesel, which is 57% cheaper than today for petrol and 74% cheaper than today for diesel. Inflation of course plays a role but so do increased taxes and duties.

If we paint a picture of the fuel running costs of the average motorist in 2022, what do we see? For a start, surveys indicate the average motorist drives 17,000 km per year in an average family hatchback, which probably has a 50-litre fuel tank. That motorist is currently paying €92 for an average fill of petrol or €95 for an average fill of diesel. In recent weeks, a number of customers have paid more than €100 per tank. Those who drive larger vehicles, whether by choice or necessity, such as a seven-seat car, are still paying more than €100 per tank. According to AA Ireland calculations based on this, the average petrol car owner is spending €2,234 on petrol per year or €1,900 per year on diesel. The diesel car is likely to go further because they are slightly more efficient. In the case of a petrol car, that driver is spending €680 more per year just on fuel than two years ago and €700 more in the case of diesel. By AA Ireland calculations, for every 20 cent increase in the price of fuel, the average driver adds approximately €240 per year to their fuel bill.

It is also important for us to indicate that there are actions motorists can take while driving that can reduce their fuel use when driving. For example, research indicates that driving at 100 km/h rather than 120 km/h on a motorway can reduce fuel consumption by more than 20%. In addition, a tyre underinflated by 10% can increase fuel use by 2%. For those living in urban centres, there is an alternative to a car. They are not always taken up but many of us might jump on a Dublin bus, a DART, Luas or a bike in a cycle lane to get to our destination. The reality for many Irish consumers and AA Ireland customers is that in less densely populated areas, this can be very difficult.

We know that people living in rural areas are much more dependent on their cars and that, in many instances, they simply do not have the variety of options that those living in more densely populated areas have.

This was borne out by statistics from the CSO, in the national travel survey, which showed that 12% of journeys in populated areas were by public transport and in thinly populated an rural areas, only 1.7% were made by bus and 0.2% were made by rail. Some 83% of journeys are made by car in thinly populated areas according to this data. For many people who bring their kids to school, go to college, or care for relatives, which are everyday activities, using the car has become increasingly expensive to do because of the rising costs of fuel. AA Ireland welcomes the move to electric vehicles, EVs. We are adapting our business every day to suit this change. For example, in recent weeks we took delivery of several free-wheeling hubs, to allow our patrol vans to more quickly rescue EVs and get them back on the road quickly by being towed behind a patrol van rather than being lifted on the back of a larger lorry.

The future is very much electric and we are seeing that happen. Currently, about 12% of new cars sold in Ireland are fully electric. Using an overnight rate for electricity, a full charge can cost as little as €6 for approximately 400 km of driving. The average cost of fuel is €50 for the same distance. However, the average Irish car is nine years old, and despite State subsidies, the electric car remains out of reach for many.

The reduction in duties on petrol and diesel is welcome and will have a positive impact on motorists affected by these higher prices. We all want a cleaner, greener automotive future, but running costs impact many motorists, especially those who simply do not have a wealth of transport alternatives in thinly populated areas. I thank the committee for inviting us.