It has been remarkable, over the past couple of years, just how stable the wholesale cost of oil has been, with prices paid for a barrel of the black stuff on the international trading markets actually falling quite a bit in recent months, in spite of political tensions - and outright conflict - in the Middle East and the continuing invasion of Russia in Ukraine.
Why are costs spiking so high now?
Fuel costs have jumped dramatically in the past few weeks, ever since Donald Trump decided to start a war with Iran. Whatever your political views on the matter, the all-but-inevitable result has been a huge increase in the wholesale costs of a barrel of crude oil.
The issue isn't just that Iran holds a huge amount of the world's oil reserves, but also that the country's position allows it to effectively close the Strait of Hormuz - a narrow sea channel between Iran and Saudi Arabia through which any oil tankers leaving the oil-rich Persian Gulf must pass.
How high have prices gone?
At the time of writing, a slight ease in the state of tension between the US and Iran had mollified oil prices a bit. Both West Texas and Brent Crude oil price indexes had fallen back from over $100 per barrel earlier this week, but Brent futures, at the time of writing, were back up to $110 per barrel with some forecasts suggesting that they could surge past $135 per barrel if the war continues much longer.
It's the Brent Crude index that effectively controls prices at Irish pumps, and the wholesale cost of crude oil is responsible for around 25 per cent of the final price that you pay. The rest is made up mostly of taxes - in Ireland around 60 per cent of the final cost per litre of petrol and diesel is made up of taxes, including excise duty, carbon tax and VAT.
There's around 5-10 per cent that goes to the refining process, and another 5-10 per cent that makes up the retailer's profits.
Are we being gouged for petrol prices?
That depends on your definition. Certainly, retailers in any given area will tend to follow the price of the next filling station over, and that can cause something of an imbalance. In general, high-traffic filling stations, whose tanks need to be topped up quickly and regularly, will see prices change more quickly than smaller stations who may receive a less regular delivery, but many retailers will simply adjust their price to more or less the local average.
That average had hit a massive high in Ireland, with prices for petrol heading above €1.90 per litre and diesel above €2.25 per litre in some outlets before the Irish government stepped in to reduce excise duty and the NORA contribution (National Oil Reserve Agency).
So far, the Irish government is saying that the cuts in excise duty - along with some taxation changes aimed at easing the cost burden on the haulage industry - are temporary and are only supposed to be in place until the end of May. However, in spite of some hopeful signs during the week, right now there's no end in sight for this war.
Prices at my local station are still high, though. Seriously - am I being gouged?
Not necessarily. In fact, according to Kevin McPartlan, spokesperson for Fuels For Ireland (FFI - the body that represents Ireland's fuel importers and retailers) the full cost of the current fuel spike has not yet been passed on, depending on which fuel you use.
McPartlan told CompleteCar.ie: "It is important to note that wholesale market dynamics are continuing to exert upward pressure on prices in light of recent developments, including strikes on energy infrastructure and the closure of the Strait of Hormuz.
"While retail prices for motorists have risen by 25.5c per litre for unleaded and 55c per litre for diesel respectively, wholesale prices have risen by approximately 31c for unleaded, and 63.5c for diesel from 1st to 22nd March, which demonstrates that fuel retailers in Ireland have not passed on all cost increases.”
The Irish Government has now stepped in to cut excise duty and other costs that inflate the price at the pumps, much as it did in the wake of Russia's initial invasion of Ukraine, to help reduce the impact of fuel prices, especially on those who have no access to public transport, as well as for the haulage industry, whose fuel costs partly define the price we pay for groceries and household necessities.
Those changes did help, causing a fall in the price at the pumps, but the background price of crude oil is already eating into those cuts.
McPartlan urged consumers to be patient with prices at fuel retailers as tax changes are announced, because taxes are levied at the point of departure from the refineries: "Excise duty is applied at the last taxation point before fuel enters the retail supply chain. In Ireland, this is typically seen at fuel terminals, for example Dublin Port, and smaller regional ports.
"Any fuel leaving these points up to midnight on the day of the change is charged at the current (higher) excise rate, as retailers cannot retrospectively adjust the tax paid on existing stock.
"In practical terms, while policy changes may be implemented overnight, it will take some time for the full effect of those reductions to work their way through the supply chain and be visible to consumers in every forecourt nationwide. We are urging motorists who are preparing to fill up on Wednesday morning to be conscious that these changes may not be reflected immediately. Prices will fall progressively, not simultaneously.”
Will fuel prices come down?
Eventually, probably, yes. If the current war comes to some sort of end, and the crisis abates, then fuel prices will most likely relax. If Trump continues to act erratically? Who knows?