Fuel prices at gas stations have remained relatively stable despite a significant drop in wholesale costs, according to the AA. The motoring organization reported that the wholesale price of petrol has decreased to levels last seen in 2021 before the Russia-Ukraine conflict and subsequent price surge. This drop in prices is attributed to oil prices falling below $60 per barrel, the lowest since May, following potential peace negotiations between the two nations. Market analysts anticipate an oversupply of oil in the coming year.
Despite garages experiencing a more than 7 pence per liter reduction in petrol costs by the end of last week, drivers have not observed a corresponding decrease in pump prices. The national average petrol price stood at 137.3p per liter this week, only marginally lower than the 137.5p at the beginning of December. The AA estimates that if the full wholesale price reduction were passed on to consumers, drivers could save approximately £4.60 on filling a standard 55-liter tank.
Diesel prices have also seen a minor decline in pump prices compared to the wholesale cost. The average diesel price dropped from 146.9p per liter at the start of the month to 146.6p on Monday. These developments coincide with the upcoming holiday season, where many motorists are preparing for long journeys and may miss out on potential savings.
The AA expressed concern over the delay in passing on wholesale price reductions to consumers, highlighting instances where pump prices have even increased. Luke Bosdet, the AA’s pump prices spokesperson, noted the stagnant pump prices in December and emphasized the missed opportunity for reductions. The Competition and Markets Authority previously raised alarms over increased fuel price margins by retailers, suggesting possible exploitation of consumers.
Gordon Balmer, executive director at the Petrol Retailers Association, reassured that reductions in wholesale fuel prices are gradually reflecting on pump prices ahead of the holiday season.