Rising oil prices have pushed average unleaded petrol and diesel prices up 1.5ppl in the past fortnight, according to the latest monthly AA Fuel Price Report, but is says retailers are being slow to increase prices in response to rising costs.
It reported that in mid-January the average price of unleaded petrol was 108.91ppl with diesel at 116.11ppl, and by February 1 prices reached a low point with unleaded petrol at 106.39ppl and diesel 113.42ppl.
However, by mid-February unleaded petrol had risen again to 108.28ppl with diesel at 115.06ppl, and the AA reported that this week drivers started to complain as prices at some forecourts rose a penny a day in quick succession.
But the AA said there was no indication of profiteering by retailers and indeed they were being slow to pass on rising costs.
Its analysis of the average pre-tax pump price of petrol against its wholesale cost shows that a fierce and sustained price war in January squeezed margins and despite the rapid price rises, the full force of a 4ppl hike in wholesale costs has yet to hit the average pump price.
It said the price of oil has rebounded 30% since mid January, from $46 a barrel to above $60 this week.
AA president Edmund King compared the situation to when prices crashed during 2008 and then there was a sustained increase in prices. He said: “There is hope that the price of oil will settle back to around $50 a barrel. However, the lesson of 2009 is that, apart from a short period of falling prices in the summer, the cost of petrol maintained a gradual climb through to the May of 2010.”