The Automobile Association (AA) has revealed that UK drivers are missing out on substantial savings at the pumps, with forecourt prices failing to reflect a significant recent drop in wholesale fuel costs.
The Growing Gap Between Wholesale and Retail
According to the motoring organisation, the wholesale cost of petrol has tumbled to levels last seen in 2021, before Russia's invasion of Ukraine triggered a global price spike. This reduction is linked to oil prices falling below $60 a barrel in recent weeks, driven by speculation over a potential peace deal between Russia and Ukraine and expectations of an oversupplied market next year.
The AA's data shows the price garages pay for petrol began falling in the third week of November and was down by more than 7p a litre by the end of last week. However, the average price paid by drivers has remained virtually static. The nationwide average stood at 137.3p a litre on Monday 16th December, having begun the month at just 137.5p.
Christmas Getaway Hit by Lost Savings
This lag means motorists are missing a major financial benefit, particularly as millions prepare for Christmas travel. The AA calculates that if the full wholesale cut had been passed on, drivers could be saving around £4.60 on a typical 55-litre tank fill-up.
The trend is similar for diesel. While wholesale costs have fallen, the average pump price has dropped a mere third of a penny, from 146.9p to 146.6p per litre in the first half of December.
AA spokesman on pump prices, Luke Bosdet, commented on the situation, stating, "With some AA members reporting pump prices where they live actually increasing over the weekend, the current pricing is creating misery for drivers and businesses." He added that average prices for early December were "stuck on a plateau when they could have fallen."
Regulatory Scrutiny and Industry Response
The findings place forecourt owners under renewed scrutiny. This follows a summer warning from the UK's Competition and Markets Authority (CMA) that retailers' fuel price margins had risen well above historic levels. The CMA labelled its own September findings as "deeply concerning" and is due to release its latest quarterly analysis of prices and margins soon.
In response, Gordon Balmer, Executive Director of the Petrol Retailers Association, insisted, "Falls in the wholesale price of fuel continue to filter through to pump prices ahead of the holiday season." The industry awaits the CMA's next report, which could pile further pressure on retailers if it shows profit margins have widened.
