Pump prices for drivers have remained relatively stable despite a significant drop in wholesale costs, according to the latest findings from the AA. The motoring group reported that the wholesale price of petrol has decreased to levels not seen since 2021, before the onset of the conflict between Russia and Ukraine and the subsequent price surge. This decline was driven by a drop in oil prices to below $60 per barrel, the lowest since May, following talks of a potential peace agreement between the two nations. The oil market is projected to be oversupplied in the coming year.
While garages have experienced a more than 7p per liter reduction in petrol costs since mid-November, drivers have yet to see a significant decrease in pump prices. The national average price at the pump stood at 137.3p per liter this week, only marginally 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, drivers could have saved around £4.60 on filling a standard 55-liter tank.
Similarly, diesel prices have not mirrored the wholesale cost decline, with pump prices dropping by just a third of a penny from 146.9p per liter at the start of December to 146.6p this week. These findings come as many motorists prepare for the holiday season and plan long journeys, potentially missing out on substantial savings.
The AA expressed concern over the delay in price reductions reaching consumers, with some areas even reporting pump prices increasing over the weekend. Luke Bosdet, the AA spokesperson, highlighted the frustration felt by both drivers and businesses, emphasizing the missed opportunity for lower prices in the first half of December. This situation follows a warning from the UK competition watchdog earlier in the year about elevated fuel price margins, raising questions about possible consumer exploitation.
Gordon Balmer, executive director at the Petrol Retailers Association, reassured that the drop in wholesale fuel prices is gradually being reflected in pump prices ahead of the holiday season, aiming to provide relief to consumers.