Fuel prices at the pump have remained steady despite a significant drop in wholesale costs, according to the AA. The motoring organization reported that the wholesale price of petrol has decreased to levels last seen in 2021 before the conflict between Russia and Ukraine and subsequent price increases. This decline is attributed to falling oil prices, which reached below $60 a barrel in May due to potential peace talks between the two countries and an anticipated oversupply in the oil market next year.
Although garages started paying less for petrol in late November, with costs dropping over 7p per liter by the end of the week, drivers have not yet seen a noticeable decrease in pump prices. The national average for petrol stood at 137.3p per liter this week, only slightly lower than the starting price of 137.5p per liter in December. If the full wholesale price reduction had been passed on to consumers, they could have saved approximately £4.60 when filling a standard 55-liter tank.
Similarly, diesel prices have not reflected the same level of decrease as wholesale costs. The average diesel pump price went down by a mere third of a penny from 146.9p per liter at the beginning of December to 146.6p per liter this week. These findings are concerning as many motorists prepare for holiday travel, potentially missing out on significant savings at the pump.
The AA expressed uncertainty regarding the delay in passing on lower costs to consumers but refrained from directly criticizing retailers. Luke Bosdet, the AA’s spokesperson on fuel prices, mentioned the frustration felt by drivers and businesses due to stagnant pump prices despite wholesale reductions. The Competition and Markets Authority had previously raised alarms about retailers profiting excessively from fuel sales, signaling further scrutiny of industry practices and pricing structures. Executive director Gordon Balmer of the Petrol Retailers Association emphasized that reduced wholesale fuel prices should translate into lower pump prices, especially during the holiday season.