In the past month, the average pump price of petrol has fallen from 137.64ppl to 132.16ppl, while diesel has dropped from 142.50ppl to 139.12ppl.
The price falls have cut £2.74 off the cost of refuelling a small petrol car and £3.84 off the bill for a Mondeo-sized petrol vehicle.
Explaining the reason for the fall, the AA said that for the past month, the wholesale price of petrol has been largely at the same level as it was during December. This has brought the current pump average back to where it started the year, at around 132ppl. Retailers have responded with prices that are, for the most part, remarkably consistent with where they started the year.
Amongst the supermarkets, Asda and Sainsbury’s decisions to fully reflect the fall in wholesale prices has been a huge benefit for drivers and businesses.
Commenting on the outlook for pricing over the coming weeks, the AA said: ‘The prospect of a further drop in pump prices is doubtful, with the pound losing some of its value against the dollar and a US budget agreement likely to strengthen the American currency. The averted industrial action at the Grangemouth refinery reduces the threat of higher oil and wholesale fuel costs in NW Europe.
‘However, the future of UK refineries is back under the spotlight. Market reports have been carrying “Europe awash with gasoline” and “Europe’s oil refiners choke on flood of US, Asian imports’ headlines since the beginning of October. At the beginning of the month, trading houses predicted the closure of more refineries over the next two years. In May, the International Energy Agency noted that: “Increased European reliance on trading houses and third-party suppliers may also leave a growing share of European supply in the hands of market participants with a different set of incentives than those of refiners.”'
The AA’s president Edmund King said of the threat on refineries in the British Isles: ‘The AA urges the Government to find ways to support them. Last year’s bitter experience of speculator-inflated pump prices, fuelled by refinery closures, should be warning enough – even before considering the loss of UK manufacturing jobs.’
