AA plea for fuel price transparency

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Published: Friday 21st November 2014 by The News Editor

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Motorists are still getting a poor deal at petrol pumps despite a big dip in the price of fuel in the last month, the AA has said.

Forecourts have taken the blame for being slow to pass big falls in world oil prices on to motorists.

But the AA said today that higher VAT, fluctuating exchange rates and increased margins over the last four years for retailers and suppliers and for refiners and market traders have all combined to keep pump prices comparatively high.

AA president Edmund King said: “If the forecourts think they are being blamed unfairly and the Government wants to get it right when pointing the finger of blame for families and businesses being denied the benefit of lower fuel costs, there is a very simple solution: oil, wholesale and pump price transparency.”

The AA said the average petrol pump price has dipped from 127.22p a litre in mid-October to 122.93p this week. Diesel has fallen from an average of 131.30p a litre to 127.43p.

However, AA analysis shows that since November 2010 the rise in the wholesale price of petrol across north west Europe has been much lower than the rise in the margins for retailers and suppliers and for refiners and petrol commodity traders.

It all means that although the wholesale price of petrol is back to where it was four years ago, the cost of petrol at the pumps is still a lot higher now than the average of 118.83p a litre in this week in November 2010.

Regionally, London currently has the most expensive petrol, averaging 123.2p a litre. Yorkshire and Humberside has the cheapest, at 122.7p.

Scotland is the most expensive place for diesel with an average of 128.0p a litre while Yorkshire and Humberside is the cheapest at 127.2p.

Mr King said: “Over the past nine years, the AA has called for fuel price transparency in the UK – as is the case in the USA, Australia and South East Asia.

“In 2012, the UK came within inches of getting it when the then transport secretary Justine Greening called in the fuel industry. But the industry threw up obstacles and last year’s Office of Fair Trading report into UK pump pricing whitewashed its importance.”

He went on: “Since the oil price has fallen from 90 dollars a barrel to well below 80 dollars in the past six weeks, drivers have been giving the retailers stick for not bringing their pump prices down more. The Government jumped on the bandwagon at the beginning of November with the Treasury also putting pressure on retailers.

“The fact of the matter, though, is that retailers dragging their feet when passing on lower costs to the pump is only part of the problem.”

Mr King continued: “It is also about time the EU commission investigating oil and fuel prices reported at least some of its findings or gave a progress report – to explain why the commodity cost of petrol remains high when the oil price falls.

“European motoring organisations, representing 35 million motorists, still haven’t had a satisfactory answer as to why petrol’s commodity price hit 1,200 dollars a tonne with oil at 147 dollars a barrel in 2008 but then returned to 1,200 dollars in 2011 with oil at only 125 dollars a barrel.”

Published: Friday 21st November 2014 by The News Editor

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