Fuel prices at the pump have remained relatively stable despite a significant drop in wholesale prices, according to the latest report from the AA. The motoring organization highlighted that the wholesale cost of petrol has reached a level not seen since 2021, predating the conflict between Russia and Ukraine, which led to a surge in prices. This decrease in prices comes as global oil prices hit a low of under $60 per barrel, following talks of a potential peace agreement between the two nations and expectations of oversupply in the oil market next year.
Although garages have experienced a decrease of over 7p per liter in petrol costs since mid-November, drivers have yet to see significant savings reflected at the pump. The national average petrol price stood at 137.3p per liter this week, only marginally lower than the starting price of 137.5p per liter at the beginning of December. The AA estimates that if the full wholesale price reduction had been passed on to consumers, they could have saved approximately £4.60 on a typical 55-liter tank refill.
Similarly, diesel prices have also seen a minor reduction, with the average pump price dropping by just a fraction of a penny from 146.9p per liter to 146.6p per liter over the same period. This disparity between wholesale and retail prices has raised concerns among motorists as they prepare for holiday travel, potentially missing out on significant cost savings.
The AA expressed confusion over the delay in passing on wholesale savings to consumers but refrained from directly criticizing retailers. Luke Bosdet, the AA’s spokesperson on fuel prices, expressed disappointment at the lack of significant price decreases, noting that some areas even reported price increases over the weekend. This stagnation in pump prices contrasts with the potential for reductions, leaving drivers and businesses feeling the financial strain.
The Competition and Markets Authority previously raised alarms about fuel price margins in the industry, emphasizing that profit margins had exceeded historical levels. The upcoming release of the CMA’s latest quarterly report on fuel prices and margins will likely intensify scrutiny on the industry if profit margins are perceived to be inflated.
Gordon Balmer, executive director at the Petrol Retailers Association, assured consumers that reductions in wholesale fuel prices are gradually being passed on to pump prices ahead of the holiday season.