Amid rising fuel prices at the pumps, the RAC point out wholesale prices have dropped and that the savings aren’t being passed on to the customer; prices are now starting to relax

Fuel prices are beginning to relax, as supermarket Asda announced a price cap of £1.25 for petrol and £1.28 for diesel across its UK filling stations - a drop of up to 3p and 2p respectively, reports the Guardian.

The move will likely lead other retailers to drop their prices to compete, following an explosion in petrol pricing, despite wholesale costs falling. 

On the same day that Asda announced its price drop, the RAC called on fuel retailers to lower petrol and diesel prices for consumers to match a recent fall in wholesale prices.

RAC fuel spokesman Rod Dennis said: “At last, retailers have done the right thing and started to cut prices at the pumps. From our data, we could see no justification for them holding on to savings that they have been benefiting from for three weeks. It is absolutely right that at times when wholesale prices are falling, forecourt prices follow suit.”

The average price of a litre of petrol increased by 6p to 129.41p in May — the steepest monthly rise in 18 years, according to RAC figures. 

High oil prices are blamed for the high pump price, in addition to the weak pound against the US dollar (oil is traded in dollars). But speculation around Organization of the Petroleum Exporting Countries (OPEC) states agreeing to halt their squeeze on oil supply, which is currently inflating prices, has made prices fall at wholesalers in preparation for a larger dip. 

OPEC meets on 22 June, and prices have fallen in the weeks leading up to the meeting. However, retailers have not lowered their prices accordingly, sparking concerns that retailers are stockpiling profits ahead of a possible price war if a price dip happens, rather than matching their prices to the wholesale cost. 

Dennis said: “Our data shows that it’s high time retailers cut the price of petrol and diesel at the pumps; we see no good reason for them to wait before passing on savings they are benefiting from, which have been brought about by falling wholesale prices.

“The oil price, together with the sterling/dollar exchange rate, are notoriously volatile, which means the price retailers pay when they buy fuel fluctuates regularly. But given how rapidly prices can go up when the wholesale price rises, it is not right that when wholesale prices fall, many retailers seem to wait before making a headline-grabbing cut."

There have been suggestions that, rather than increasing supply, OPEC could continue its limit or cut it further to push up prices. The current price for a barrel of oil is around $80, but an OPEC squeeze could send this up to $100. Should oil prices reach three figures for a barrel, this could lead to record pump prices. In April 2012, the average price for a litre of petrol was around £1.43 but, due to the weaker pound, if oil now exceeds $100/barrel UK retail fuel prices would almost certainly surpass this. 

 

Read more:

Steady rise in supermarket fuel prices

Fuel prices set to rise as Opec reaches production-slowing deal

Autumn Budget 2017: diesel tax hike confirmed

Buying fuel in litres but measuring efficiency in gallons makes no sense

Brexit set to drive up fuel prices

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13 June 2018
And given that fuel costs are a high part of their cost base, I call on the RAC to lower their prices to customers as soon as fuel prices do drop.

And why is RAC membership so much more expensive the AA or Green Flag membership?

13 June 2018

Why should oil always be traded in dollars?

We should be able to trade oil using other currencies too.

13 June 2018

These figures say it all, compare the barrel price from 2008 to 2018 and the average fuel prices to them, even adjusting the exchange rate it's now a rip off today: -

June 2008Petrol 118.2 p/litreDiesel 131.6 p/litreOil $139.83 / barrel

May 2018Petrol 125.5 p/litreDiesel 128.3 p/litreOil $66.07 / barrel

13 June 2018
mysteryx wrote:

These figures say it all, compare the barrel price from 2008 to 2018 and the average fuel prices to them, even adjusting the exchange rate it's now a rip off today: -

June 2008Petrol 118.2 p/litreDiesel 131.6 p/litreOil $139.83 / barrel

May 2018Petrol 125.5 p/litreDiesel 128.3 p/litreOil $66.07 / barrel

Does anyone remember that 10 years ago, we were told the huge difference between the price of diesel and petrol was because of the lack of diesel refineries? And it was more costly to produce diesel? We didn't built anymore diesel refineries but by magic the price differential reduced to a few pence again.

The prices are high because we as the consumer tollerate those high prices - it's no more complicated than that.

 

13 June 2018
scotty5 wrote:

mysteryx wrote:

These figures say it all, compare the barrel price from 2008 to 2018 and the average fuel prices to them, even adjusting the exchange rate it's now a rip off today: -

June 2008Petrol 118.2 p/litreDiesel 131.6 p/litreOil $139.83 / barrel

May 2018Petrol 125.5 p/litreDiesel 128.3 p/litreOil $66.07 / barrel

Does anyone remember that 10 years ago, we were told the huge difference between the price of diesel and petrol was because of the lack of diesel refineries? And it was more costly to produce diesel? We didn't built anymore diesel refineries but by magic the price differential reduced to a few pence again.

The prices are high because we as the consumer tollerate those high prices - it's no more complicated than that.

 

British patriots who represent us in Parliament are more worried about  their investments in Russia and Singapore, it is better for them if prices are higher for the British consumer, if you elect business  to represent you in Parliament they are not going to legislate for lower prices for the consumer. Look how the EU regulates lower phone prices while the UK governenment let the rail companies run amock with fare increases. You won't read that in the British press though which is owned by Lord Rothermere who lives in France and USA Murdoch.

13 June 2018

 Very soon there’ll be a 10p off per litre when you spend £50.00 at the big four Supermarkets....!!!

Peter Cavellini.

13 June 2018

Never liked supermarket fuel so always got Shell, problem is the difference seems greater than ever at around 8% so I'm beginning to feel ever so slightly cheated

typos1 - Just can’t respect opinion

13 June 2018
Why do they need to keep manipulating the market like they do - aren't they rich enough? Just how many gold Lamborghinis do they need ffs ?

13 June 2018
Actually the retailers have a very good reason to keep the prices high: it's called profiteering and higher prices generate more for the government too. So everyone is happy that is other than us the vehicle owners and drivers.

13 June 2018
So. You are an expert of this are you?

I am a fuel retailer.

I am currently BUYING petrol for 122.8ppl.

I am selling it for 128.9ppl.

So I make a profit of 5ppl after VAT.

Exactly what price do you feel I should be selling it for?

Two thirds of the pertol stations that existed 30 years ago have closed.

You clearly feel this is because they were making too much money.

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