Pump prices for motorists have seen little change despite a significant drop in the prices paid by fuel stations, according to the latest findings from the AA.
The motoring organization reported that the wholesale price of petrol has decreased to levels last observed in 2021, before the onset of the Russia-Ukraine conflict and subsequent price surge. This decrease in prices coincides with oil prices dropping to their lowest point since May, dipping below $60 per barrel, following talks of a potential peace agreement between the two nations. Market experts anticipate an oversupply of oil in the coming year.
The AA noted that garage costs for petrol began declining in the third week of November, plummeting by over 7 pence per liter by the end of the recent week. However, drivers have not yet experienced these savings, as the average pump price for petrol has barely shifted during the same period, standing at 137.3p per liter nationwide this week, a minuscule decrease from the start of December.
If the entire wholesale price reduction had been passed on to consumers, drivers could have saved approximately £4.60 when filling a typical 55-liter tank, according to the AA.
Similarly, diesel prices at the pump have not mirrored the drop in wholesale costs, with the average price only decreasing by one-third of a penny from 146.9p per liter at the beginning of December to 146.6p per liter this week.
As millions of drivers prepare for holiday travel over Christmas, many may be missing out on potential savings at the pump. The AA expressed concerns over the delay in passing on the cost reductions to consumers, although they refrained from directly criticizing retailers.
The Competition and Markets Authority previously raised alarms over retailers’ increased fuel price margins, suggesting that motorists may be facing inflated costs. The CMA is set to release its latest assessment of fuel prices and profit margins, which could further intensify scrutiny on the industry.
Gordon Balmer, executive director of the Petrol Retailers Association, affirmed that reductions in wholesale fuel prices are gradually translating into lower pump prices ahead of the festive season.