Petrol Prices Fail to Fall

The AA has stated that petrol prices have stagnated over the past month despite a fall in wholesale cost.

Prices have failed to fall despite being expected to following the wholesale price falling by 2 pence per litre.  The average price in the UK has remained at 112 pence per litre.

Thoughts are that supermarkets are responsible for the freeze in prices.  In recent years, they have always led price cuts and others have followed suit, however they have been slow to cut their prices this time around.

The AA has also said that long term, UK motorists staring down the barrel of a constant upward trend in their fuel costs.

Meanwhile, the average Diesel price has also remained the same throughout the country at 114 pence per litre.

Brief Respite

The price report conducted by the AA has shown that certain supermarkets have lowered their prices back below the so-called driver tolerance threshold of 110 pence.  Although, they have also shown that some motorway service stations, where the price is traditionally slightly higher, motorists are paying up to 10 pence more than the going rate.

Yorkshire and Humberside have shown to be the cheapest places for motorists to fill their tank, whereas Northern Ireland has shown to be the most costly.  

"We know from our research that £1.10 a litre is when driver tolerance of higher fuel prices begins to evaporate, and £1.12 may have been sufficient for many car owners to reconsider who they buy their fuel from," said AA president Edmund King.

"The AA fears that the recent fall in the wholesale price is only a brief respite."

The higher petrol prices are thought to be one of the main reasons for the UK inflation rate seeing a sharp rise to 3.5% in January, this is the fastest annual pace it has grown for well over a year.

The recent VAT rise back to 17.5% is also thought to have been a major cause.

Posted at 09:00AM Feb 21, 2010 by Marc Stenton in The Economy  |  Comments[0]