Despite a significant drop in wholesale prices, the AA has reported that fuel costs for drivers have remained relatively stable.
The motoring organization disclosed that the wholesale price of petrol has decreased to levels last seen in 2021 before the conflict between Russia and Ukraine, leading to a subsequent price surge. This decline coincided with oil prices plummeting to below $60 per barrel, the lowest since May, following discussions of a potential peace agreement between the two nations. There are projections of an oversupply in the oil market for the upcoming year.
According to the AA, the cost of petrol for garages started declining in the third week of November, with a reduction of over 7p per liter by the end of the recent week. Despite this, drivers have not experienced a noticeable drop in the average pump price of petrol during the same period. As of Monday this week, the national average stood at 137.3p per liter, slightly down from 137.5p at the beginning of December.
The AA estimated that if the entire wholesale price decrease had been passed on to consumers, they could have saved around £4.60 on a typical 55-liter tank refill.
In addition, diesel prices at the pump have also seen a minor decrease compared to the wholesale cost. The average price for diesel dropped by just a third of a penny, from 146.9p per liter at the start of December to 146.6p on Monday.
These revelations come as numerous motorists prepare for holiday travel during Christmas, where many will be refueling for long trips but may miss out on potential savings.
The AA expressed uncertainty about the reason for the delayed price adjustments this time but refrained from directly criticizing retailers. Luke Bosdet, the AA’s pump prices spokesperson, mentioned concerns about reports from AA members indicating rising pump prices in certain areas, causing distress for drivers and businesses. The stagnation in average pump prices for the first half of December suggests a missed opportunity for reductions.
Following the UK competition watchdog’s warning in the summer about increased fuel price margins, there have been renewed allegations of consumer exploitation.
Gordon Balmer, executive director of the Petrol Retailers Association, emphasized that “Decreases in fuel wholesale prices are beginning to reflect in pump prices ahead of the holiday season.”
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