Gas prices at the pump have stayed relatively stable despite a significant decrease in wholesale costs, as reported by the AA. The motoring organization disclosed that the wholesale price of gasoline has dropped to levels last seen in 2021, before the conflict between Russia and Ukraine and the subsequent price surge. This decline is attributed to oil prices hitting their lowest point since May, dropping below $60 per barrel due to potential peace talks between the two nations, leading to an expected oil surplus next year.
Although garage costs for gasoline started decreasing in late November, plummeting by over 7p per liter by the end of the previous week, drivers have not experienced any substantial savings. The average pump price for gasoline has only slightly decreased, standing at 137.3p per liter this week compared to 137.5p at the beginning of December. The AA estimated that if the full wholesale price reduction had been passed on to consumers, they could save around £4.60 when filling a typical 55-liter tank.
Similarly, diesel prices at the pump have not mirrored the wholesale cost reduction. The average diesel price has only slightly dropped from 146.9p per liter at the start of December to 146.6p per liter this week. These findings have emerged as many motorists prepare for holiday travel, potentially missing out on significant cost savings when refueling for long journeys.
Despite the lag in passing on lower costs to consumers, the AA refrained from directly criticizing retailers. Luke Bosdet, the AA’s pump price spokesperson, expressed concern over the lack of significant price reductions, suggesting that current pricing is causing distress for drivers and businesses. This situation follows the Competition and Markets Authority’s previous warning about retailers’ fuel price margins exceeding historical levels, raising suspicions of consumer exploitation.
Gordon Balmer, the executive director at the Petrol Retailers Association, emphasized that reductions in wholesale fuel prices are gradually being reflected in pump prices as the holiday season approaches.