Fuel price hikes could lead to ‘fuel tourism’ costing Irish economy €230m | BreakingNews.ie

The Irish Petrol Retailers Association is warning that fuel tourism across the border to Northern Ireland could cost the Irish economy €230 million if fuel prices are increased again at the end of October.

David Blevins told RTÉ radio’s Morning Ireland that the Minister for Finance Michael McGrath should have a “steady hand” in the Budget as there could be a general election next year.

Consumers’ budgets were being stretched with VAT on hospitality going back from 9 per cent to 13 per cent while there is also a high level of inflation. “Our message, what we have said to Michael McGrath is we would like to see the 31st October increase delayed into the spring of next year and to see what is happening in global energy markets.”

Mr Blevins said that retailers had no choice but to increase prices. “At the end of the day, the retailer’s at the end of the chain, they must respond to the increase and decreases in wholesale refined costs. And if an excise duty increase is put on or a VAT change is put on, that is applied to the retailer. So the retailer has no choice.”

Oil was a globally traded product, prices change rapidly each day and since May 1st there had been 15 per cent to 20 per cent in wholesale costs which were again passed on to the retailer who had to pass them on to the customer, explained Mr Blevins.

If prices stay at the current level and the increase goes ahead on 1st November then fuel will be cheaper in Northern Ireland with a difference of 14c per litre on petrol and 6c per litre on diesel.

“What you will see then is fuel tourism. People in the border counties will cross into Northern Ireland, fill their vehicles, especially in HGVs, because it makes a substantial difference and they will also buy products, groceries, etcetera, and return home so that that will have a major impact on not only border stations, but it will also have a major issue on our tax take as well.”

Mr Blevins pointed out that in 2018 when fuel tourism was coming in the other direction – from Northern Ireland to the Republic – the Irish economy was benefiting from €230 million from cross-border shopping.

“I think Michael McGrath has to play a very steady hand if we’re looking at a general election next year. If you’re looking at loss of revenue in terms of cross-border shopping, I think all that has to be taken into account.”