Pump prices for motorists have shown little change despite a significant drop in the costs at fuel stations, according to the AA. The motoring organization reported that the wholesale price of petrol has decreased to levels last witnessed in 2021, predating the conflict between Russia and Ukraine and the subsequent price surge. This drop aligns with oil prices hitting their lowest point since May, dipping below $60 per barrel due to potential peace negotiations between the two nations and an anticipated oversupply in the oil market for the upcoming year.
The AA noted that garage expenses for petrol started declining in late November, plummeting over 7p per liter by the end of the recent week. However, drivers have not yet experienced any significant savings, as the average petrol pump price remained virtually unchanged over the same period. As of this week, the national average stood at 137.3p per liter, only slightly lower than the 137.5p at the start of December.
If the full wholesale price reduction had been passed on to consumers, drivers could have saved approximately £4.60 on a typical 55-liter tank refill, the AA mentioned. Diesel prices have also seen a minor decrease compared to wholesale costs, with the average pump price dropping by just a third of a penny from 146.9p per liter at the beginning of December to 146.6p currently.
These observations come at a time when numerous drivers are preparing for the holiday travel rush during Christmas, potentially missing out on substantial savings at the pump. The AA expressed uncertainty regarding the delay in price adjustments this time, refraining from direct criticism of retailers. Luke Bosdet, the AA’s pump price spokesperson, highlighted the frustration among drivers and businesses due to stagnant prices, suggesting a need for price reductions that have not materialized as expected.
Following concerns raised by the UK’s competition watchdog earlier this year regarding increased fuel price margins by retailers, fresh allegations of consumer exploitation have emerged. The Competition and Markets Authority expressed unease over the pricing trends in the petrol and diesel sectors, with plans to release a detailed report on pricing and profit margins. Any perceived profit inflation could heighten scrutiny on the industry.
Gordon Balmer, the executive director at the Petrol Retailers Association, affirmed that reductions in wholesale fuel prices are gradually being reflected in pump prices ahead of the festive season.