Petrol prices have risen to their highest in almost a year, with motorists expected to face further increases in the coming months. Meanwhile, the Irish Petroleum Industry Association (IPIA) says service stations are closing at the rate of one a week.
The average price of unleaded petrol now stands at 115.9 cent a litre, up 12 per cent since the start of the year, according to the latest figures from the AA's monthly survey. The average price for April was 111.1 cent a litre.
Diesel now costs an average of 108.5 cents, up from 106.8 cent last month. "Prices are up, they're staying up and they'll be up for quite some time," said Conor Faughnan of the AA.
The rise comes amid warnings that parts of Ireland could become a "petrol desert" after 10 years of station closures.
New figures from the IPIA show that 80 stations closed last year and more than 200 the year before. At 1,147, the number of service stations in the country has halved over the past decade. However, it denied the closure of so many forecourts was a factor in driving up prices.
There remain huge variations in petrol prices. While a number of Dublin garages were offering petrol for under 113 cent yesterday, the dearest station, Statoil on Usher's Quay, was charging 154.9 cent a litre. With a captive market of traffic heading west from Dublin Port and few competitors nearby, this station has increased its prices three times in the past two months.
An IPIA spokesman said margins were extremely tight because of intense competition. Service stations were required to display their prices clearly on large signs, so motorists enjoyed the freedom to pass by stations they considered too expensive.
Many of the main international oil retailers had left Ireland, he pointed out, including Statoil, Shell (both of whose outlets are now owned by an Irish company, Topaz), Jet, Burmah and BP.
"It would be regrettable if Ireland were to go the way of France, where you often have to drive miles out of your way to get petrol. This is not only environmentally wasteful, it's batty."
Mr Faughnan said the disappearance of so many service stations was a worry. While Ireland was not yet a "petrol desert" it was "trending" that way. Many urban stations had been sold off because they occupied lucrative development sites.
"Rumours of the death of the service station are greatly exaggerated. Ultimately, the market will provide, but for the moment, with so many urban stations closing and the promised new motorway stations not yet on stream, there has to be a negative impact on motorists."
Factors behind the price rise include the euro's strength against the dollar and the approach of summer, a peak time for car journeys. In the longer term, with demand for oil from China and India expected to remain high, there is little prospect of a fall in petrol prices.
One way of pushing down prices might be for the Government to permit the building of extra-large service stations, but the IPIA warned that any such move could accelerate the creation of "petrol deserts".
"It would be most unwise for Government to allow hypermarkets to operate below-cost selling of petrol subsidised by their profits on groceries," the spokesman said.
"In countries where this happens, you have just two service stations north and south of each city, with long queues in each."
Tesco, which is not a member of the IPIA, operates nine service stations at its retail units in Ireland. IPIA figures show there were 2,457 service stations in Ireland in 1995. However, this figure now stands at just 1,147.
