Are fuel prices finally reversing? Data shows first ‘significant’ fall in petrol and diesel costs for more than a year as wholesale prices plummet
- Petrol and diesel prices have come down by around half a penny in the last week
- The last time there was a drop of this amount was in early November 2020
- A year ago, unleaded fell half a penny to 114p – 33p cheaper than today
- Motoring groups urged retailers to slash prices after oil fell by $10 on Friday
- The AA says a lack of a Christmas supermarket fuel price war in 2021 has contributed to prices remaining high
The nation’s motorists have seen the first ‘significant’ fall in average fuel pump prices since November 2020 following more than five weeks of record-high costs at forecourts, according to the latest report.
Prices in the last week have come down by around half a penny on average, with petrol dipping to 147.28p-a-litre while diesel also dropped to 150.64p.
The last time petrol prices declined by this amount at forecourts within one week was in November 2020, when unleaded was 114p per litre – some 33p cheaper than it is today.
The AA says a lack of a Christmas supermarket ‘fuel price war’ so far in 2021 has contributed to prices remaining high, with Asda traditionally the first to spark cuts across retailers.
Are fuel prices finally in reverse? Petrol and diesel have come down by around half a penny in the last week. The last time drivers witnessed such a decline was early November 2020
Average price of petrol on Tuesday had dipping to 147.28p-a-litre while diesel also dropped to 150.64p
Drivers across the country have been desperate for pump prices to go into reverse following months of continued increases which saw the nine-year record high price of both petrol and diesel obliterated by the end of October.
The new UK record for the average price of unleaded is 147.72p-a-litre, set on 21 November. For diesel, the record high came a day earlier when average pump prices reached 151.10p on 20 November.
However, with the price of oil falling by $10-a-barrel on Friday over concerns about the outbreak of the Omicron variant, motoring groups have been calling on retailers to slash costs for cash-strapped motorists.
The AA says wholesale prices paid by fuel companies had plummeted in the final days of November – yet retailers have blocked these savings from being passed on to customers.
Having peaked above 54.5p a litre in the second week of November, the wholesale petrol cost to retailers was down to 49p at the start of last week and yesterday dropped below 43p-a-litre.
It means retailers could have offered cuts of up to 12p-a-litre in the last few days but have instead retained sky-high charges for fuel.
The AA says a lack of a Christmas supermarket ‘fuel price war’ so far in 2021 has contributed to prices remaining high, with ASDA traditionally the first to spark cuts across retailers
Motoring groups have this week called on the Government to step in and investigate why retailers have refused to cut their forecourt prices in light of easing wholesale costs, with the RAC saying the industry has been ‘living up to the worst rocket and feather behaviour’ and, as a result, ‘losing all credibility with drivers’.
The AA says the traditional ‘fuel price war’ between major supermarkets – which usually sees the big four slashing pump prices in the build-up to Christmas to tempt shoppers into their stores – has not materialised so far in 2021 and is contributing to fuel costs remaining so high.
‘Such has been the dramatic fall in the wholesale cost of petrol and diesel that a fall in the pump prices has become inevitable. It’s just taken so much longer than has happened over recent years,’ said Luke Bosdet, the AA’s fuel price spokesman.
‘Other than the lack of pump price movement even after a fortnight of falling wholesale costs, the other feature that sticks out is the supermarkets’ failure to seize the initiative as they have in the past.
‘Previously, the market would wait until Asda or Morrisons announced a price cut before starting to move.
‘Without that initial kick, pump prices have stagnated, and that is a potentially worrying development if it sets the pattern for the future.
‘In basic pounds, shillings and pence, if a supermarket makes a big deal about discounts of £2 or £3 off the shopping bill but grabs back £2 to £3 per tank by not passing on savings at the pump, the consumer needs to factor that in.
‘And meanwhile, the majority of the non-supermarket forecourts have been very happy to play along.’
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