Noel Coonan (Tipperary North, Fine Gael)
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Question 487: To ask the Minister for Communications, Energy and Natural Resources if he will compare the average price of diesel at present with the average price of diesel in May 2007; the reason for the hike in price; his plans to reduce the price in the future; and if he will make a statement on the matter. [21001/08]

Eamon Ryan (Dublin South, Green Party)
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I have no function in relation to controlling the price of oil, diesel or petrol. The Irish oil industry is fully privatised, liberalised and deregulated. There is free entry into the market. Prices at the pump reflect market factors such as global market price, transportation costs, Euro/Dollar fluctuations and other operating costs.

The Competition Authority is a statutory independent body with specific responsibility for the enforcement of competition law. The National Consumer Agency has specific statutory responsibilities for protecting the rights of consumers. Both have responsibility for ensuring that competition works optimally for the benefit of consumers throughout the country. EU price figures published on 19th May, 2008, show that the average price of diesel in Ireland in April was €1.248 per litre. The corresponding figure for April published in May 2007 was €1.072 per litre.

Traditionally, diesel has been less expensive than petrol in Ireland at the forecourts. This was due to the fact that the international prices for both products were at a similar level, and excise duty is lower on diesel. The excise differential in favour of diesel is 7.46 cents. The international price of diesel is determined by supply and demand, and the increase in demand for diesel which is taking place both within Europe and in China and other rapidly-developing economies world-wide, has pushed up the international price for diesel above the price of petrol. The increase in the demand for diesel has led to a shortage in European refineries, and diesel is now being sourced from farther afield, particularly from Russia. The International Energy Agency (IEA) has also reported that US refiners have been producing substantially more petrol than usual and domestic US stocks are very high. These factors are likely to have curbed flows of exports of petrol from Europe to the US, leaving Northwest European petrol stocks above average. The combination of all of these market factors has contributed to the rise in European diesel prices relative to petrol.