ANYONE who has been asleep or abroad for the past six months and bought petrol in the past few days should be forgiven for thinking that the UK’s rip-off pump prices had been frozen in time – that’s the conclusion of the latest AA Fuel Price Report.
In the past month, the average UK petrol price has fallen 3.87p a litre, from 138.95p to 135.08. Diesel prices are down 1.85p a litre, from 143.74 to 141.89. Although drivers welcome the relief, there is much more in the pipeline.
AA research reveals that, despite the threat of an Office of Fair Trading investigation of the road fuel market, conditions that led to drivers and businesses being short-changed at the pump in the spring have happened again.
Across Europe, the wholesale price of petrol has fallen from around 54p a litre at the beginning of October to around 45p by the end. With VAT, this should have knocked average UK petrol prices down by 10p to 11p a litre.
But after reaching a plateau of around 139p a litre in mid October, UK petrol pump prices were down by less than 4p a litre by the start of this week.
Six months ago, the value of wholesale petrol across Europe had fallen $220 a tonne between mid April and the first week of May, the equivalent of 11p-12p a litre at the pump with VAT. However, by mid May, only 4p of the saving had been passed on at the pump.
The AA is now able to match movements of UK wholesale prices for petrol with ethanol and diesel with biofuel against price movements at the pump. These show that, since early October, the wholesale price of unleaded with ethanol has fallen from around 53p a litre to around 45p at the start of November – equivalent with VAT to a 10p drop at the pump.
During the same period, the wholesale price of diesel with biofuel fell from around 56p a litre in early October to around 52p at the start of November – equivalent with VAT to a 5p a litre drop at the pump.
But average diesel pump prices have fallen only 1.85p a litre between mid October and mid November (changes in wholesale prices typically take 10-14 days to be reflected at the pump).
Fuel price data supplied by Experian Catalist
Wholesale price data provided by fuelpricesonline.com