The price of petrol at UK pumps has fallen by 4ppl in the past month but with a 10ppl drop in the wholesale petrol price across northern Europe, there is still 6ppl to go, the AA has said.

In its latest Fuel Price Report, published today, the AA said that a yawning gap between what UK drivers are paying for petrol and what the fuel is worth across Europe has only now begun to close, but noted that on the continent, Germany is looking to force the pace by becoming the third country to regulate road fuel prices.

Average UK petrol pump prices have fallen 4.08ppl in the past month, down from a record high of 142.48p a month ago to 138.40p this week. Diesel drivers are now paying 3.58ppl less than a month ago, with average pump prices falling from 147.88p to 144.30. 

Monthly fuel costs for a family with two petrol cars has fallen by £8.66 and filling up the 80-litre diesel tank of a commercial van now costs £2.86 less.

However, the same two-car family would be £21.23 better off a month and non-fuel consumer spending boosted by £5.1m a day if the $200-a-tonne or 10ppl fall in the wholesale price of petrol across northern Europe was reflected at UK pumps, the report added.

Further reductions of ‘up to’ 2ppl by supermarkets this week will put some towns back on track to enjoying the benefits of falling wholesale costs, although drops of up to 8ppl by some independent retailers shows already what can be achieved, the AA said.

Last Wednesday (May 2), Germany ran out of patience with pump prices as its government decided to force retailers to log price information. A market transparency agency, attached to the German cartel office, has had its role extended beyond domestic energy to include road fuels.

This mirrors the approach already adopted by Austria, whose average price of petrol before tax undercut the UK’s despite a weaker euro, stronger pound and the UK fuel industry’s claim that it sells the cheapest pre-tax petrol in western Europe. Denmark also regulates fuel prices, with suppliers registering a list price before each day’s trading and retailers logging each price reduction on a database that can be viewed by drivers.

Edmund King, the AA’s president, said: “A £2-a-tank saving for drivers eases some of the pressure on UK families and business, but there is so much further to go. It was noticeable that there has been a flurry of 2p-price-drop and fuel-voucher announcements since the tanker drivers voted not to strike on Friday.

“Germany’s move towards fuel price regulation, the third European country to do so, reflects a growing consumer and political backlash against high fuel prices at a time of recession. Since 2005, the AA has argued the need for transparency in the road fuel market, from supplier to retailer, and now a more severe form is being forced on the industry,

“We would prefer an Australian or US-style form of transparency, with a regulator acting as honest broker for suppliers, retailers and consumers. But, if regulation spreads further across Europe, we won’t stand in its way. Indeed, the Austrian and Danish systems may be a better way to deal with the price differences between neighbouring towns that infuriate huge numbers of UK drivers.”

Regionally, the influence of more competitive supermarkets, such as Asda (trading more than a penny below its nearest rival on petrol and nearly 2p cheaper on diesel), has knocked a further half penny off petrol prices in its northern heartlands.

After politicians in Northern Ireland debated fuel prices in the Assembly, the gap between what drivers there pay for petrol (139.5p) and the next most expensive in the UK, London and the South East (138.9p), has almost halved from last month’s 1.1p-a-litre difference. Scotland, whose average petrol price last month nearly matched the northern England regions’, now lags half a penny behind them. 

Southern England, despite its concentration of people and fuel stations, trades on average half a penny lower than the North and Midlands, while the West and Wales find themselves in the middle ground.

The cheapest petrol is being sold on average in Yorkshire and Humberside (137.9p), 1.6p-a-litre lower than Northern Ireland, the most expensive region. Diesel is dearest in London and the South East at 145.1p a litre, compared to the lowest average of 143.6p in the North, North West and Yorkshire and Humberside.