Fuel Retailers Not Passing On Savings Despite Fall in Oil Prices
Brent crude oil prices fell to $59.20 per barrel, the lowest since February 2021, with wholesale oil prices dropping by more than 7% in December. This decline is attributed to ongoing talks about a Russia–Ukraine peace deal and the potential easing or lifting of sanctions, which could increase the oil supply. Analysts have noted that sanctions relief could release tens to hundreds of millions of barrels of oil, including an estimated 170 million barrels of Russian oil currently stored on water. US President Donald Trump stated that a Ukraine deal is closer than ever, while Ukrainian President Volodymyr Zelenskyy mentioned that proposals with US officials could be finalized within days.
Despite this fall in crude prices, average UK petrol prices marginally declined from 137.5p per litre at the start of December to 137.3p per litre, and diesel prices fell slightly from 146.9p to 146.6p per litre by this week. AA spokesperson Luke Bosdet highlighted that forecourts are not passing these savings onto drivers effectively, with some retailers even increasing prices last weekend. According to AA analysis, if the savings were fully passed through, petrol prices could have dropped by 7p per litre by the end of last week, potentially saving drivers more than £4.60 including VAT on a typical 55-litre fuel tank. Currently, prices remain effectively on a plateau despite the reduction in wholesale oil costs.
