The head of an Irish oil firm says there is now a 'compelling argument' to scrap the carbon tax.

David Horgan, chairman of Petrel Resources plc, was speaking as petrol prices continue to rise amid the ongoing Russian invasion of Ukraine.

He told The Pat Kenny Show the rising prices mean now is the wrong time for a carbon tax.

"The carbon tax, for example, is very high in Ireland - and due to double.

"But why do we need a carbon tax now?

"The point of the carbon tax was supposed to be to deter consumption of fossil fuels.

"But the markets are already doing that job for us, and you've already got that 23% VAT across the top.

"So I think there's a compelling argument now to simply suspend the carbon tax, at least for the duration of the current crisis".

'Uncharted territory'

Industry experts are predicting a litre of car fuel could hit €2.60.

David explains where the estimates come from.

"If you just look at what's already in the price - i.e. what has already happened in the crude price five or six weeks ago that has yet to come through to the forecourt - given the lower taxes now, you get about 2.04 on standard petrol and about 2.18 on standard diesel.

"But in addition, we really are in uncharted territories now with the sanctions on Russia.

"Ten days ago we put very severe financial sanctions on Russia, but there was a big effort to carve out oil and gas particularly.

"What's actually happened in recent days is that the traders have stopped buying Russian crude for all sorts of reasons.

"And what that's led [to] - just over the weekend - I was told the Indian National Oil Corporation, ONGC, for its share of the Sakhalin production in the far east.

"We've never been in a situation like that."

He adds: "Ten days ago, Shell took a cargo from the Russians at a $28.5 discount - which was great money... but they were forced to then apologise to the stakeholders and say they weren't going to take any more Russian crude".

And he says if this represents just half of Russian oil exports, around 3.5 million barrels will be taken off the market.

While the Transport Minister has admitted plans to cut excise duty paid on petrol and diesel 'won't be enough'.

Last week Minister Eamon Ryan told Newstalk the Government has gone as far as it can.

"I think we should be honest with the public and say 'No, it won't be enough'.

"We are in exceptional circumstances and the level of price increases, it isn't possible and it changes by the day.

"And it keeps changing, so I don't think you could ever do enough."

He added: "We just have to be clear and honest: we can't fully protect against all the consequences of that.

"But we went to the max of what we could do within European law, and doing it in a way that was designed to be quick".