Drivers to See Fuel Price Drops if Retailers Pass on Wholesale Savings, RAC Analysis Suggests

A recent analysis by the RAC indicates that motorists might soon experience relief at the pumps, with fuel prices potentially dropping from their six-month high. According to the RAC, average costs for petrol could decrease by at least 6p per litre, and diesel by 3p per litre, provided that retailers promptly transfer the savings from wholesale price reductions to their customers.

Currently, average pump prices sit at approximately 139p per litre for petrol and 146p per litre for diesel. This forecast comes after wholesale prices significantly fell, driven primarily by a reduction in global oil prices. The cost of crude oil has dropped from a high of over 80 US dollars per barrel recorded in January, down to below 70 US dollars per barrel recently.

Simon Williams, the RAC's head of policy, noted the positive shift, emphasizing that drivers have been struggling with steadily rising prices for the past five months. Williams said retailers should begin lowering prices soon, as they restock their supplies at lower wholesale rates. If these reduced oil prices remain consistent around the 70-dollar mark, prices may return closer to 130p per litre for petrol.

However, Williams points out that the critical factor determining whether drivers actually benefit from these reduced wholesale costs will be retailer decisions to pass savings on fully to their customers. He expressed hope that the old saying "prices go up like a rocket, but come down like a feather," won't apply this time around.

In a related recent investigation, the Competition and Markets Authority watchdog discovered UK motorists overpaid significantly for fuel due to increased retailer margins. Drivers paid £900 million more than necessary at supermarkets during 2022 and collectively £1.6 billion more at all retailers throughout 2023 owing to similar margin hikes.