Pump prices for drivers have remained relatively stable despite a significant decrease in wholesale costs, according to new data from the AA.
The motoring group reported that the wholesale price of petrol has dropped to levels last seen in 2021, before the onset of the Russia-Ukraine conflict and subsequent price surge. This decline coincided with oil prices reaching their lowest point since May, dipping below $60 per barrel due to potential peace negotiations between the two countries. Analysts anticipate an oversupply in the oil market next year.
Although garages started paying less for petrol towards the end of November, with prices falling by over 7 pence per liter by last week, drivers have yet to see substantial savings at the pump. The national average petrol price stood at 137.3p per liter this week, only marginally lower than the 137.5p recorded at the start of December.
If the full wholesale price drop had been passed on to consumers, drivers could have saved approximately £4.60 when filling up a standard 55-liter tank, the AA estimated.
Similarly, diesel prices on forecourts have not decreased proportionately with wholesale costs. The average diesel pump price decreased by just 0.3 pence, from 146.9p per liter at the beginning of December to 146.6p per liter this week.
As holiday travel approaches, millions of motorists are preparing for long journeys and fuel stops, potentially missing out on significant savings.
The AA expressed uncertainty about the delay in passing on price reductions to consumers but refrained from directly criticizing retailers. Luke Bosdet, the AA’s spokesperson, highlighted concerns about the stagnant pump prices, noting that prices could have fallen during the first half of December.
Amidst these developments, the Competition and Markets Authority previously raised alarms about retailers’ fuel price margins surpassing historical levels, suggesting possible consumer exploitation. The CMA is set to release its latest review of petrol and diesel prices, which could further intensify scrutiny on the industry.
Gordon Balmer, executive director at the Petrol Retailers Association, emphasized that reductions in wholesale fuel prices are gradually translating into lower pump prices ahead of the holiday season.