Petrol prices could pass the €2 a litre mark for the first time as soon as the weekend, as oil has surged to its highest price since 2014.
The crisis in Ukraine has driven prices up further and is adding to supply concerns, with prices reaching nearly $100 a barrel.
The global benchmark Brent crude jumped by more than 3% and touched a seven-year high yesterday as it peaked at $96.
Fuel pump prices are at record highs and energy experts are predicting forecourts could pass the €2-a-litre level for petrol for the first time as soon as the weekend.
At €2 a litre, the cost of running the average car on average mileage goes up by €2,450 a year, according to AA Ireland figures.
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The AA's Paddy Comyn warned last night: "It's a little bit "finger in the air" but we'll see what the weekend is like, God knows what'll happen in the next couple of days. You could see the price breach the €2 mark by the weekend. This has definitely unsettled the market, we've seen that already."
Most garages were charging 179c a litre for petrol yesterday. Analyst Norbert Rucker, of Swiss bank Julius Baer, said: "We see the oil market in a period of frothiness and nervousness, spiced up by geopolitical fears and emotions. Given the prevailing mood, oil prices may very likely climb into triple digits in the near term."
However, when asked yesterday if the Ukraine crisis would lead to rising fuel prices, Tánaiste Leo Varadkar said: 'Nobody can predict that for sure.'
He also warned that if Russia decides to take retaliatory measures against the EU, it could have an effect on Irish business.
He added: "We'll co-ordinate any response at a European level. I think we have to do what's right here, and that is to stand by the territorial integrity of Ukraine and to respect the right of that democratic independent country to determine its own future."
Russia exports about five million barrels of crude oil a day, making it one of the world's largest suppliers with about a 12% share of the global market. Traders calculate supplies will struggle to cushion the effect from any significant disruption in Russian fossil fuel exports.
Kevin McPartlan, head of Fuels for Ireland, which represents the major oil suppliers, said: "It is all but inevitable that the ongoing Ukraine/ Russia crisis will lead to yet further upward pressure on fuel prices. With about 10% of global oil supplies originating in Russia, any sanctions will obviously impact global levels of supply and drive prices yet higher."
