Colm Keaveney (Galway East, Fianna Fail)
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136. To ask the Minister for Finance the cost to the Irish economy of the lag by the market in wholesale and retail markets in passing on the recent falls in crude oil prices; if this failure to pass on the full fall in crude oil prices continues at its current magnitude the effect that this will have on our GDP and GNP; and if he will make a statement on the matter. [49559/14]

Michael Noonan (Limerick City, Fine Gael)
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Brent crude oil has fallen by about 45 per cent in euro terms (nearly 50 per cent in US dollar terms) since the  macroeconomic projections to underpin Budget 2015 were finalised. This will have implications for economic activity in Ireland in real and nominal terms.

On the real side, it should be recalled that Ireland is a net energy importer and as such any unanticipated fall in oil prices will havea positive impact in the short term.  Lower energy prices reduce firms' input costs, thus improving profitability and  competitiveness.  At the household level, lower energy prices are likely to lead to an increase in real disposable incomes, which can be used to reduce indebtedness or increase consumption.  As a result, there is some upside potential to real domestic demand forecasts as announced in the Budget.

There is generally a lag between movements in prices at wholesale and retail level given that suppliers have entered into forward contracts.  The Irish oil industry is fully privatised, liberalised and deregulated and there is no price control on liquid fuel products in Ireland.  All persons selling certain fuel products are legally required to specifiy on their premises the price per litre being charged to the consumer for these commodities.  Consumers are strongly encouraged to inform themselves of the different price offerings in their localities so as to enable them to proactively seek out the best value when purchasing fuel products.