Drivers are not seeing significant reductions in pump prices despite a notable decrease in wholesale costs, as reported by the AA. The motoring group indicates that petrol’s wholesale cost has dropped to levels last observed in 2021 before the Russia-Ukraine conflict and subsequent price surge. This decline follows a decrease in oil prices to below $60 per barrel, the lowest since May, amidst talks of a potential peace agreement between the two nations. Forecasts suggest an oversupply in the oil market for the upcoming year.
Although garages have experienced over a 7p per litre reduction in petrol costs by the end of last week, drivers have yet to benefit, with only marginal changes in pump prices. The national average remained steady at 137.3p per litre this week, barely down from the starting figure of 137.5p in December. The AA estimates that if the entire wholesale cost reduction was passed on, drivers could save approximately £4.60 on a typical 55-litre tank refill.
Similarly, diesel prices have seen minimal decreases compared to wholesale costs. The average diesel pump price dropped slightly from 146.9p per litre at the beginning of December to 146.6p on Monday. As the holiday season approaches, millions of motorists preparing for long journeys may miss out on potential savings at the pump.
The AA expressed concern over the delayed pass-through of wholesale cost reductions to pump prices, noting that some drivers have even seen price increases. Luke Bosdet, the AA’s pump prices spokesman, remarked on the stagnation of average pump prices in December, implying that they could have decreased. This situation arises after the UK’s competition watchdog previously highlighted elevated fuel price margins by retailers, sparking further debates about consumer exploitation.
Gordon Balmer, the executive director at the Petrol Retailers Association, emphasized that reductions in wholesale fuel prices are gradually being reflected in pump prices as the holiday season approaches.
