Pump prices for motorists have remained relatively stable despite a significant drop in the costs faced by fuel stations, according to the latest data from the AA.
The AA highlighted that the wholesale price of petrol has plummeted to levels last observed in 2021, before the onset of the Russia-Ukraine conflict and subsequent price surges. This decline came in conjunction with oil prices hitting their lowest point since May, dipping below $60 per barrel, following discussions of a potential peace agreement between the two nations. Expectations indicate an oversupply in the oil market for the upcoming year.
Despite the decrease in what garages pay for petrol, drivers have not experienced significant savings at the pump. The average petrol price only saw a marginal reduction, sitting at 137.3p per liter nationwide as of Monday, compared to 137.5p at the beginning of December. The AA estimated that if the entire wholesale drop had been passed on, drivers could have saved approximately £4.60 when filling a standard 55-liter tank.
Similarly, diesel prices at forecourts have not fully mirrored the decline in wholesale costs. The average diesel pump price has only decreased by a fraction, dropping from 146.9p per liter at the start of December to 146.6p this Monday.
As the holiday season approaches and many motorists prepare for extended journeys, the discrepancy between wholesale and pump prices raises concerns about missed opportunities for significant savings.
The AA expressed uncertainty about the reasons behind the delayed pass-on of lower costs to consumers this time. Luke Bosdet, the AA’s spokesperson on fuel prices, mentioned the frustration experienced by drivers and businesses due to stagnant pricing. The organization hinted at a possible change as pump prices showed a slight decrease on Monday but highlighted the missed opportunity for more substantial reductions.
This issue arises following the Competition and Markets Authority’s warning earlier in the year about heightened fuel price margins by retailers in comparison to historical levels, sparking accusations of unfair pricing towards motorists.
Gordon Balmer, executive director at the Petrol Retailers Association, emphasized that reductions in wholesale fuel prices are gradually reflected in pump prices ahead of the festive season.