A fall in the cost of oil and a strengthening of the pound means petrol prices at the pump should soon be coming down, according to the RAC.
Data from RAC Fuel Watch shows the wholesale price of unleaded has reduced in the past week, and the RAC claims this makes it possible for the major supermarkets to cut at least 3ppl off the forecourt price.
The average UK price of petrol stands at 131.56ppl while the average price charged at the four big supermarkets is 128.02ppl. The wholesale price of unleaded has in the last few days dropped below £1 a litre, and the RAC claims this means the pump price of petrol at supermarket forecourts should be around 125ppl accounting for delivery, retailer margin and VAT.
Oil has fallen from a four-year high of $86.23 on 4 October to $83.85 on 10 October. Meanwhile the pound has improved against the dollar from $1.29 on 2 October to $1.31 on 10 October.
However, the price of diesel is not expected to come down, having risen by nearly 13ppl this year while petrol has increased by 10ppl.
RAC fuel spokesperson Simon Williams said: “Major fuel retailers should be reacting to the sharp drop in the wholesale price of petrol by knocking at least 3ppl off at the pumps. Motorists have suffered with rising petrol prices for most of this year with 10ppl being added since the start of January.
“We are sure retailers will do the right thing and pass the savings on to drivers, but the question is how long will it take for them to do this. As this has come about as a result of a sudden drop in the wholesale price they can’t yet be accused of holding off on cutting, but if prices don’t fall soon then we fear this will be further evidence of the so-called ‘rocket and feather’ effect where prices go up far more quickly than they fall.
“The speed with which we have gone from seemingly endless pump price rises to a sudden moment when they should really be coming down very clearly demonstrates the volatility of wholesale fuel and how UK motorists are at the mercy of the international markets.
“The oil and currency changes have also improved the diesel price situation, with the constant rises coming to a halt for the time being.”