Belfast Telegraph

Thursday 24 July 2014

'No benefit' from dip in oil cost

Hard-pressed motorists have seen little or no benefit from the recent fall in crude oil prices, the AA has said.

A 7% drop in the value of the pound against the dollar since August has denied drivers the possibility of a 2p per litre price cut on petrol, the motoring organisation said.

Prices dipped around 1.5p in August but have climbed again leaving petrol and diesel within a fraction of their all-time high seen in May, even though the market prices of crude oil fell by over 10%.

The average cost of a litre of petrol in the UK is now 135.61p, while a litre of diesel is 139.62p, meaning there has not been the usual downward move following the end of the summer driving season, said the AA.

President Edmund King added that the price of Brent crude was also $10 a barrel out of line with the US equivalent of light crude, something that was potentially worth 5p a litre to UK motorists.

However, Mr King said: "UK families are being held hostage to fuel price movements that continue to buck traditional trends and oil prices that don't even make sense to experts in the market."

The AA estimates £12.6m a day is being "siphoned" away from the high street and other spending into fuel sales.

The industry points out that some 60% of the pump price is accounted for by fuel duty and VAT, with another 10% going on delivery costs, marketing and profit margins.

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