18 February 2011
European petrol prices dropped in line with wholesale price reductions while UK prices continued to rise. Rarely has the need for transparency in UK pump prices been so clearly illustrated, according to the latest AA Fuel Price Report.
Had a 2p drop in the market cost of petrol been passed on to drivers here, it would have wiped out most of January's VAT rise helping to reduce inflationary pressure and the possibility of an interest rate rise.
Mid-February average petrol prices have hit yet another all-time high, now standing at 128.81p a litre, up 0.54p from mid-January.
Diesel prices have also reached a new record of 134.01p, up 1.26p on the mid-January average.
A year ago, petrol cost on average 112.10p/litre and diesel 113.84p/litre.
Drivers spent £8.36 less to fill a typical 50-litre petrol tank and and £10.09 less to fill a diesel tank.
In Europe prices saw a 4.3% drop between the middle and end of January reflecting a 4% drop in NW Europe wholesale costs in the same period.
Even with wholesale prices rising again in February, the European average petrol (pump) price on 7 February was still 3% lower than it had been three weeks before. In the UK, petrol cost 0.8% more and reached new record highs.
Cheapest supermarket prices in neighbouring towns can vary by up to 4p a litre, re-establishing the level of postcode lottery pricing that angered drivers so much last summer.
Along the A96 in Scotland this week , cheapest supermarket petrol prices ranged from 125.9p a litre to 129.9p.
In Kent the cheapest supermarket fuel in the Margate/Ramsgate area costs up to 4p more than in neighbouring Canterbury and Whitstable.
The AA continues to call for a published track of wholesale versus pump prices, as is available in the US, Australia and South East Asia. Greater price transparency will help protect the interests of retailers, consumers and Government.
As well as scrapping the fuel duty increase on 1 April, the AA wants to see a fuel price regulator appointed, as is available with domestic energy.
A regulator wouldn't tell retailers how much they should sell their fuel for but would act as an honest broker between markets, retailers and consumers, helping to clarify price movements and price differences between neighbouring towns.
"It is irrelevant whether retailers are trying to compensate for lower volumes of sales or supermarkets are choosing to convert fuel cost savings into cut-price toilet cleaner offers. European fuel retailers are under similar strains yet they passed on much of the wholesale petrol price reduction. They also reduced diesel prices for a while," says Edmund King, the AA's president.
Northern Ireland stands out as the most expensive UK region for both petrol and diesel while drivers in Yorkshire and Humberside once again enjoy the cheapest prices.