Pump prices for motorists have remained relatively stable despite a significant drop in wholesale prices, according to the AA. The motoring organization noted that the wholesale cost of petrol has decreased to levels last seen in 2021 before the Russia-Ukraine conflict and subsequent price surge. This drop in prices has been influenced by declining oil prices, reaching under $60 per barrel, following discussions of a potential peace agreement between the two nations, leading to an anticipated oversupply in the oil market next year.
Although garages have experienced a more than 7p per liter reduction in petrol costs since the third week of November, drivers have not yet benefitted from this decrease. The average pump price for petrol has seen minimal change during the same period, standing at 137.3p per liter nationwide as of this week, just slightly lower than the 137.5p at the beginning of December. The AA estimated that if the full wholesale price reduction had been passed on to consumers, they could potentially save around £4.60 when filling a standard 55-liter tank.
Similarly, diesel prices have not mirrored the wholesale cost decline, with the average pump price decreasing by only a third of a penny from 146.9p per liter at the start of December to 146.6p per liter this week. These findings come as many motorists prepare for holiday travels during Christmas, potentially missing out on significant savings at the pump.
The AA expressed concern over the delayed reduction in pump prices, with some areas even experiencing price increases over the weekend. The organization urged for quicker adjustments to reflect the declining wholesale costs and provide relief to drivers and businesses. This situation has raised previous concerns highlighted by the Competition and Markets Authority regarding inflated fuel price margins by retailers, potentially leading to further scrutiny on the industry’s practices.
Gordon Balmer, from the Petrol Retailers Association, emphasized that the drop in wholesale fuel prices is gradually being reflected in pump prices ahead of the holiday season, aiming to reassure consumers of forthcoming relief.