Ulster drivers may be paying over the odds for petrol
Thursday, 7 August 2008
Drivers in Northern Ireland could be paying up to 11p more than they should for a litre of fuel at many forecourts, an industry expert warned today.
The news comes after it emerged that a global fall in oil prices of almost $30 has not been reflected in prices at the pumps, which have not fallen to the same extent.
Since mid-July, the cost of a barrel of oil has plummeted from $147 to around $118 on Tuesday — the lowest level since May this year.
But speaking to the Belfast Telegraph, AA spokesman Andrew Howard said that hard-pressed drivers here — who already pay more for fuel than most of their European neighbours — are not reaping the potential benefits of slashed prices.
“Motorists in Northern Ireland could be paying as much as 9p a litre more than they should be, while diesel prices are up to 11p higher than they should be,” he said.
“Our calculations suggest that retailers should be cutting a penny off diesel and petrol with every two dollar fall in oil prices.
“Retailers should be reacting more rapidly to the fall in oil prices just as they do when they go up.”
By the AA’s assessment, drivers should have seen the average cost of a litre of petrol falling from 120.3p to 106.8p and its diesel counterpart dropping from 133.85p to 120.25p.
Instead the latest pump price for petrol is, on average, 115.85p, while motorists are still paying around 128.92p for diesel — with regional variations playing havoc with many motorists’ budgets.
Just one week ago, Asda, Tesco and Sainsbury’s weighed into a fuel war, promising to slash prices by up to 4p.
But, fuel experts claim to have noticed little reduction in the cost of petrol and diesel at other forecourts.
Indeed, data supplied by PetrolPrices.com suggests that in areas such as Londonderry, petrol is currently costing as much 123.9p, while outlets in Belfast are today charging up to 142.9p for diesel.
The website’s director Brendan McLaughlin said that retailers appeared to be dragging their feet.
“It does seem like petrol companies aren't passing on the savings they're making as a result of lower oil prices,” he said.
“But there are two reasons for this. Oil price changes generally take around two to six weeks to filter through to the pumps, and it was around three weeks ago the supermarkets started cutting prices — that's why we've seen around a 4p per litre drop in Northern Ireland.
“This should be the start of a slight dip in prices, as long as oil prices stay lower, however, oil prices are predicted to rise again so pump prices are still set to increase in the long term.
“The second reason is that the dollar isn't as weak against the pound as it has been in the past, meaning that because oil is priced in dollars, motorists in the UK aren't feeling the benefit of falling prices as much as those in the US. “
Ray Holloway, the director of the UK Petrol Retailers Association, defended the industry.
“What we are selling now is derived from crude oil that was bought when prices were higher,” he said.
“There is normally a time lag of four to six weeks for the reduction to feed through. This time it will be quicker than this, prices will be coming down in the next week to 10 days.”
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I think it's time we all should show these 'big' petrol retailers that we won't stand for their failure to quickly reduce prices when oil prices come down (they would certainly raise them quickly enough if the oil price went the other way!!). All too often in the last couple of days I've seen people filling up at the oil industries big players pumps, when, just down the road, a supermarket is selling petrol/diesel at least 5p a litre cheaper. Correct me if I'm wrong, but if we ALL started using the supermarket's stations to fill up, wouldn't the empty forecourts of the non-supermarket stations hurry them into getting their prices into line with the rest of the more realistic supermarket prices? We all should really wake up, cause we are being ripped off!!
Posted by Keith, East Belfast | 07.08.08, 19:32 GMT
Petrol prices go up faster than they come down. The reason for this is simply that business is milking the general population.
The reason given by the retailing federation for prices remaining high don't make sense as the pound, though falling, still remains high against the dollar and also utilising this argument means that petrol prices should never have reached their astronomically high prices, in the recent past, as the pound was worth more than two dollars.
Posted by Robbo | 07.08.08, 11:56 GMT