AA urges retailers to pass on drop in wholesale costs so drivers can enjoy savings at the pumps
Drivers could save £10 per tank within the next two weeks, if plummeting wholesale costs are finally reflected in forecourt prices, revealed the AA.
Prices at the pump have dropped nearly three pence a litre from record highs hit earlier this month, with average forecourt prices falling to 188.76p per litre for unleaded petrol and 196.96p per litre for diesel.
This follows sustained rallies over the past two months, that saw both fuel sources close in on an eye-watering £2 per litre.
Although prices have since receded from record levels – 191.53p for petrol on 3 July and 199.07p for diesel o n 1 July) – they remain historically elevated.
Wholesale prices for petrol peaked above £1 per litre on 1 June, but fell below 80p a litre for much of last week, indicating as much as a 20p fall from record highs at the pump within a fortnight.
The AA’s fuel price spokesman, Luke Bosdet, said: “Wholesale petrol’s trajectory, if sustained, would lead to savings of a tenner off a tank from the record highs – providing the fuel trade is prepared to pass them on. So far this morning, even with oil rebounding, wholesale petrol remains below 80.5p a litre,”
However, retailers have so far failed to pass on these reductions to consumers, attracting criticism from motoring groups AA and RAC.
Bosdet explained: “The problem is that, in many places, the price cuts are quite simply not happening despite more than six weeks of falling costs. Roads may suffer extreme heat today and tomorrow but pump prices should have cooled off much more significantly by now.”
Retailers have also faced pressure over the seeming absence of the 5p fuel duty cut.
This caused the Competition and Markets Authority to determine there was “cause for concern” in some parts of the road fuel market over prices, and has launched an in-depth study.
However, analystics group Kalibrate told City PM earlier this year prices at forecourts reflected a change of strategy from retailers.
Rather than profiteering, Tom Hatton, head of product management, argued petrol retailers were hedging amid highly volatile oil markets.
City PM has approached the Petrol Retailers’ Association for comment.