Fuel prices may take years to return to normal levels even if peace is restored in the Middle East, according to Fuels for Ireland.
The warning follows renewed tensions in the Strait of Hormuz earlier this week, after clashes involving US naval destroyers and Iranian forces. Both sides blamed each other for the incident, raising fresh concerns about global energy supplies and shipping routes.
Chief executive Kevin McPartlan said fuel markets would not stabilise until the Strait of Hormuz was operating “fully and freely” once again.
“First thing to say is it takes about 50 days for fuel to get from the Strait of Hormuz to Europe,” he said.
“So if it's refined products, then it's on the market in Ireland 52, 53 days.
“If it's crude oil that's been refined in Europe, then we have another three weeks to wait for that before it hits. That's the first point.”
McPartlan also warned that recent US and Israeli airstrikes on Iranian infrastructure had destroyed a significant portion of global refining capacity, potentially accounting for as much as five per cent worldwide.
He said repairing or replacing damaged refinery infrastructure would be a lengthy and highly specialised process, with some experts estimating it could take up to five years.
“They take a long time [to repair], they have to be done to a very, very high standard,” he said.
“There are a limited number of professionals in the world who are qualified to do that type of work.
“If you think about trying to rebuild an oil refinery, that is a really technical, complex technical issue.
“So, it takes a very long time.”
The comments come after sharp increases in petrol and diesel prices following the outbreak of the conflict prompted allegations of price gouging from some politicians.
Fuel retailers denied the claims, arguing that price increases reflected rising wholesale costs.
McPartlan said a subsequent investigation by the Competition and Consumer Protection Commission had cleared the industry of any wrongdoing.
“The CCPC has published its report, it said that there was no price gouging,” he said.
“There was no systematic anti-competitive behaviour that people were passing on the cost - wholesale prices went up.
“The first attack on Iran happened on Saturday morning, the 28th of February; the wholesale prices were up within an hour of that first attack.
“That's the nature of this business; the traders put the prices up, they put a risk premium in.”
