Eamon Ryan (Dublin South, Green Party)

As I said in my reply to the previous question, the Irish oil industry is fully privatised, liberalised and deregulated. There is free entry into the market and prices at the pump for both petrol and diesel reflect market factors, notably global market price, transportation costs, euro-dollar fluctuations and other operating costs.

Traditionally, diesel has been less expensive than petrol at the forecourts in Ireland. This has been due to the fact that the international prices for both products were previously at a similar level and excise duty is lower on diesel. The international price of diesel has, however, increased because of a rising demand for diesel in Europe, as well as in China and other developing economies. European refineries have been unable to keep pace with the demand for diesel, which means that it has to be sourced from further afield, particularly Russia.

The International Energy Agency has also reported an over-supply of petrol in the market stemming from high production and high stocks of petrol in the US. This has curbed exports of petrol from Europe to the US, resulting in high stocks of petrol in Europe. The combination of these various market factors has contributed to the rise in diesel prices relative to petrol.

The increase in the price of diesel is affecting all of Europe. EU price figure comparisons published on 19 May 2008 show that the average price of diesel in Ireland in April was €1.24 per litre. This price ranks as the eighth cheapest price out of the 27 EU member states reported by the EU on 19 May. The average price of diesel in the UK in the same report was €1.56 per litre and the average EU price for diesel was €1.40 per litre. These comparisons demonstrate that Ireland is by no means the worst affected country in Europe in respect of the price of diesel.

My officials are in regular contact with the Department of Enterprise, Trade and Employment on a range of matters, given the clear relationships between energy policy, competitiveness and enterprise. Neither Department, however, has any role in respect of price control in the oil market. Price differences are an ongoing feature of the market economy and it is a matter for consumers to exercise choice.

Additional information not given on the floor of the House.

The Deputy will be aware that petrol stations are required to display their prices clearly so that consumers can make an informed choice. Consumer protection is a matter for the Department of Enterprise, Trade and Employment and consumers can report any infringements of the law in this regard to the National Consumer Agency.

The upward global trend in oil prices and the prospects of a peak and then decline in global oil production reinforces the imperative for Ireland to reduce its oil dependency and to use energy wisely and efficiently. The actions we are taking to accelerate delivery of our targets for renewable energy and energy efficiency are essential to ensure a sustainable energy future for the economy and consumers.

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