For decades Kavanagh’s Service Station in Urlingford, Co Kilkenny, kept their fuel prices as low as possible to ensure footfall in their shop.
t was a business model that worked for founder Pierce Kavanagh, who welcomed the same motorists travelling from Cork to Dublin every week for 30 years.
At lunchtime yesterday, the family-run business was making a profit margin of 0.3c per litre on diesel which cost €2.03 per litre at the pump. The Government was making 92c on the same litre.
Caoimhe Maloney, manager of Kavanagh’s, told the Irish Independent if they don’t raise their prices by 1c overnight, they will be making a loss of 0.6c per litre.
“All we are is a tax collector for the Government at the moment,” she said.
“We are running at 0.3c of a margin on diesel. So when we dip into the 20,000 litres we had delivered this morning, we will be losing 0.6c on every single litre unless we raise our price. The situation has gone way beyond a joke. It’s just shocking.
“We have service stations to our right and left, and if they are not as busy as us and only get a delivery once a week, they are still pumping out fuel at the price they got a week ago.
“We can’t increase our price until they do. Otherwise, people won’t come in and buy the ice cream, cup of tea, or breakfast roll that keeps us going. And that is the only place any service station is making money now. To be honest, operating at a 0.3c profit margin is futile. By the time we pay the electricity to get the fuel out of the ground and pay for the disposable gloves and our staff, we are already losing money on fuel.
“The general public is very wrong if they think the fuel price is the forecourt’s responsibility. It’s very disheartening.
“But the worst thing is where you see the comments on social media where they accuse service stations of ripping people off.
“It’s the government taxes that are the problem. It is what is killing the country at the moment.
“I appreciate that we are in a terrible and unprecedented situation regarding fuel, but something needs to be done.
“That’s why the boys in the Department of Finance are paid the big bucks. They need to figure this out.”
Oliver Sharkey, chief financial officer at Kavanagh’s, said it has always made a strategic decision to keep fuel prices low, but it is proving more difficult by the day. He said: “The pressure is enormous. The margins were always very little, but over the last while, they are non-existent.”
Yesterday the Irish Independent called service stations across the country. The lowest diesel price we found was €2.02 at Top Oil, Mount Lucas, Co Offaly. The cheapest petrol was €2.07 at Hillside Service Station, Claremorris, Co Mayo.
Tom D’Arcy, owner of Top Oil in Mount Lucas, cautioned his title would be short-lived.
“The only reason I could charge that (€2.02) today was that the fuel I bought this day last week was 7c or 8c cheaper than even what I bought at the tail end last week.
“By taking the loss of one and mixing it with the profit of another, I finished up with a profit of about 1.5c per litre.
“But that’s just today’s luck.
“Tomorrow I will probably be one of the dearest in the area because the other stations who bought earlier than me this week will be 5c or 6c better than me.”