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 petrol’s wholesale price has fallen to levels last seen in 2021, prior to the Russia-Ukraine conflict and subsequent price surge. This decline was influenced by oil prices dropping to below $60 per barrel, the lowest since May, amid potential peace negotiations between the two nations. The market anticipates an oversupply of oil next year.
Although garages have seen a decrease of over 7p per liter in petrol costs since the third week of November, drivers have not experienced significant savings at the pump. The average petrol price nationwide barely changed from 137.5p to 137.3p per liter. If the entire wholesale price reduction had been passed on to consumers, they could have saved approximately £4.60 on a standard 55-liter tank fill-up, as estimated by the AA.
Similarly, diesel prices have not mirrored the wholesale cost drop, with only a marginal decline from 146.9p to 146.6p per liter from the start of December to the current week. These findings raise concerns as many motorists prepare for the holiday season trips and may miss out on potential savings.
The AA expressed uncertainty about the delayed cost reductions at the pump this time but refrained from criticizing retailers directly. Luke Bosdet, the AA’s pump prices spokesman, highlighted the frustration felt by drivers and businesses due to stagnant prices, indicating a missed opportunity for reductions. The Competition and Markets Authority’s previous warning about inflated fuel price margins and the upcoming release of its quarterly price and margin analysis further intensify pressure on the fuel industry.
Gordon Balmer, executive director at the Petrol Retailers Association, emphasized that reductions in wholesale fuel prices are gradually translating into lower pump prices as the holiday season approaches.