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Syrian crisis threat to fuel prices fades – but not for UK motorists
Last weekend, despite a 2p-a-litre fall in the wholesale price of petrol a fortnight ago and a further 3p last week, UK average pump prices barely budged from the late summer high of just above 138p a litre, the latest AA Fuel Price Report reveals.
Only on Tuesday, with this week’s wholesale price of petrol crashing below where it started the year*, has the pump price started to dip. At the turn of the year, petrol averaged 132p a litre on forecourts across the UK, and this is where it should be heading if the wholesale price collapse persists.
Over the weekend, drivers in many towns across the UK were being charged at least £2.50-a-tank more for supermarket petrol than in towns just down the road. Such is the state of road fuel price competition in the UK, officially described at the start of the year as ‘working well’.
The AA has reacted by offering millions of its longer-serving members a free fuel price locating smartphone tool to help them beat the UK’s pump price postcode lottery.
On Tuesday, the average price of petrol across the UK stood at 137.64p a litre, having reached a late summer high of 138.38p a litre on Friday and still 138.01p on Monday. That was despite Asda cutting its national petrol price cap to 133.7p last week and some independent retailers beginning to lop a penny off the cost of a litre. A month ago, petrol averaged 137.52p a litre.
Throughout the July to mid-September holiday period, although the cost of petrol failed to repeat the brief 140p-a-litre surge this time last year, UK drivers have paid on average 1.5p a litre more than they did last summer.
Comparing wholesale and pump price movements shows that, after UK petrol prices settled at 134.6p a litre through June, the impact of turmoil in Egypt and Syria on the oil price lifted that plateau to above 137p from late July onwards. It also shows the wholesale fall a fortnight ago and the dramatic collapse in the past 10 days. Yet, even last week, pump prices continued to creep up.
The average price of diesel in the UK has risen from 141.87p a litre in mid August to 142.50 in mid September. Although the wholesale price has also fallen away with the lower oil price and stronger pound, the impact has been less dramatic. Since the beginning of August, diesel’s wholesale price has moved within a range of 3.5p a litre compared to petrol’s 6p.
Our track of unleaded petrol prices shows that the industry insulated drivers against some of the late July surge – despite the retailers’ attempt to talk up the price and scare away more of their customers
Edmund King, AA president
The AA urges fuel retailers to pass on cost savings quickly, although mindful of the volatility in the fuel price market.
“UK drivers have to accept that, with such huge volatility in the international oil and fuel markets, average pump prices aren’t going to follow every twist and turn of the wholesale prices. Indeed, our track of unleaded petrol prices shows that the industry insulated drivers against some of the late July surge – despite the retailers’ attempt to talk up the price and scare away more of their customers,” says Edmund King, AA president.
“However, we draw the line at the blatantly unfair pump price postcode lottery. Yes, Asda’s prices are exceptionally low, with some independent retailers undercutting even that. But, in other towns last weekend, putting a fuel nozzle against the head of many of our members and forcing them to pay 5p a litre more for the cheapest petrol was inexcusable.”
King adds: “For that reason, we are offering more millions of AA personal members who have been with us at least a year a free smartphone fuel price comparison tool. Each time they think of filling up, they can check the cheapest pump prices nearby, check again in neighbouring areas they may be passing through and choose where to make the savings.
“If it inspires drivers to fill up away from over-priced towns, perhaps it will incentivise supermarkets and other retailers to be more competitive and charge reasonable prices more evenly across the UK. One in 50 of our younger and middle-aged AA members have had to take out a payday loan to pay for fuel in the past 18 months – the status quo is not acceptable.”
The comparison of pump prices by brand shows that, although the price gap between Asda and the other main supermarkets was at least 1.7p a litre for diesel on Monday, it was half a penny higher for petrol at 2,2p.
Regionally, London remains the cheapest UK region for buying petrol at 137.1p a litre and Northern Ireland the most expensive at 138.6p. Wales, at 138.2p, is the only other region with petrol averaging above 138p a litre.
Predominantly rural Scotland (143.4p), Wales (143.1p), Northern Ireland (143.0p) are the dearest for diesel, compared with London which is the cheapest at 141.8p a litre.
(19 September 2013)
Fuel price data supplied by Experian Catalist
Wholesale price data provided by fuelpricesonline.com
* Wholesale prices so far this week and in the last two weeks of December 2012 mirror each other at around $960 a tonne. The pound so far this week averages 1.59 dollars, compared to $1.62 in the last half of December. In the first week of January 2013, the wholesale price had risen above $985 a tonne with the pound still averaging $1.62.