Pump prices for motorists have remained relatively stable despite a significant decrease in the costs for fuel retailers, according to the latest report from the AA.
The motoring organization disclosed that the wholesale price of gasoline has dropped to levels last seen in 2021, before the outbreak of the conflict between Russia and Ukraine which led to a surge in prices. This decrease in prices is attributed to a potential peace agreement between the two nations, causing oil prices to plummet to below $60 per barrel, the lowest since May. The market is anticipated to face an oversupply in the upcoming year.
Although the AA noted a more than 7p per liter decline in what garages pay for petrol by the end of last week, drivers have yet to benefit from this reduction. The average pump price for petrol has seen minimal change during the same period, standing at 137.3p per liter nationwide this week, slightly lower than the 137.5p at the start of December.
The AA estimated that if the entire wholesale cost reduction had been passed on to consumers, drivers could save approximately £4.60 on filling up a standard 55-liter tank. Similarly, diesel prices at the pump have also decreased, but by a much smaller margin compared to the wholesale cost, with the average price dropping from 146.9p to 146.6p per liter.
These findings come as many motorists prepare for the upcoming holiday season, planning long journeys and fueling up, potentially missing out on significant savings. The AA expressed concern over the delay in price reductions, with some areas reportedly witnessing pump price increases over the weekend, causing frustration among drivers and businesses.
The Competition and Markets Authority previously raised alarms about retailers’ increased fuel price margins, leading to accusations of overcharging consumers. The authority is expected to release its quarterly report on prices and margins soon, which could further intensify scrutiny on the industry.
Gordon Balmer, from the Petrol Retailers Association, emphasized that reductions in wholesale fuel prices are gradually translating into lower pump prices ahead of the festive season.
