Drivers 'ripped off' at pumps as oil costs fall: Claims four pence a litre drop is yet to be passed on to drivers 

  • Petrol price drops driven by supermarkets cutting forecourt costs
  • Drivers in rural areas seeing no benefits as there are fewer supermarkets to compete
  • Motorists face 'postcode lottery' on extent to which they benefit from oil price drop 
  • Price of oil dropped 16% since September says AA due to weak demand 

Motorists are not seeing the benefit of a drop in oil prices (File photo)

Motorists are not seeing the benefit of a drop in oil prices (File photo)

Motorists are paying ‘rip-off’ fuel prices at the pumps because falling petrol prices are failing to keep pace with plummeting oil costs, motoring groups warned last night.

Although forecourt prices are falling – driven largely by supermarkets cutting their pump prices – it is claimed up to 4p per litre on average has yet to be passed on to drivers following a 2p drop since September.

And drivers in rural areas are being hit harder because there are fewer supermarket competitors to kick-start a price cut.

As a result motorists face a post-code lottery over the extent to which they benefit from crude oil prices tumbling on international markets.

Some filling stations just a few miles apart are charging up to 14p per litre difference at the pumps.

It comes as oil prices dropped to below $84 (£52) a barrel on US markets because of weak demand and fears of a global economic slump.

The AA said that since the beginning of September alone Brent crude has fallen from $101 (£63) to $85 (£53) a barrel – a fall of 15.8 per cent.

Even allowing for currency fluctuations, that represents a fall of around 12.4 per cent worth up to 6p at the pumps. Yet only 2p of that has so far filtered through, says the AA.

Motorists deserve at least another 4p off at the pumps – and more if oil prices continue to fall, says the motoring organisation.

The AA’s fuels expert Luke Bosdet said: ‘Are motorists being ripped off? Absolutely, they are being ripped off. And at some of the motorway stations they are being well and truly fleeced.’

He said; ‘Fuel prices are moving. Our concern is that they are not moving fast enough. And they’re not moving everywhere.

‘It is fascinating how when oil prices rise quickly, pump prices follow hard on their heels..

‘Yet when oil prices fall, many retailers appear to drag their feet.

‘So motorists see the cost of their motoring rocket up as oil prices increase, yet fall like a feather when they drop.’

Mr Bosdet said: ‘Supermarkets such as Asda, Tesco and now Sainsbury’s have been leading the charge in cutting prices as oil has fallen on international markets. ‘But the rest of the market is taking its time to pass on the benefits to motorists. So if you don’t have a supermarket in your area – especially if you live in the countryside – you will get hammered.’

The AA noted how petrol in the Shropshire market town of Market Drayton was selling for a hefty 127.9p a litre. Yet just a few miles away in Stoke on Trent – where there is more competition - it cost 122.9p a litre – a difference of 5p.

Similarly at Midhurst in West Sussex, petrol was selling at 128.9p a litre, while 7 miles away in Liphook, Sainsbury’s were selling it at 123.9p, also 5p cheaper.

Motorists deserve at least another 4p off at the pumps – and more if oil prices continue to fall, says the AA

Motorists deserve at least another 4p off at the pumps – and more if oil prices continue to fall, says the AA

The AA’s Mr Bosdet said: ‘The small rural towns are being well and truly hammered. They are being charged up to 129p a litre for petrol when in parts of London it coasts 122p – a difference of 7p.’

Some motorway service stations are also milking it, the AA warned. It noted how Sainsbury’s in Berkshire was selling unleaded at 123.9p a litre. Yet just four miles up the road at Chieveley Motorway Service station on the M4/A34 junction, unleaded was selling at 137.9p – a difference of 14p per litre.

Mr Bosdet said: ‘This once again underlines the need for transparency at oil, wholesale and retail levels so that drivers can see if they are getting a fair price at the pump.’

Yesterday three of the UK’s major supermarkets stepped up their forecourt price war. Sainsbury’s and rival Asda cut the price of diesel by up to 2p a litre and unleaded petrol by a penny. Asda, which has 232 forecourts, said its customers will pay no more than 126.7p a litre for diesel and 123.7p per litre for unleaded petrol.

We should see some further reductions in prices at the pumps as long as the markets don’t turn quickly and fuel retailers grab extra profit.‘Drivers haven’t seen such prices since 2011 but oil prices are still volatile and more global unrest in oil producing countries can just as easily send the price spiralling again. 
                    AA president Edmund King

Tesco, which is Britain’s biggest petrol retailer with about 500 petrol stations, cut unleaded petrol by 1p per litre, with diesel reducing by at least 1p a litre although some sites will get a 2p a litre price cut.

The supermarkets have been slashing forecourt prices to win back grocery customers from discount rivals Aldi and Lidl.

AA president Edmund King said: ‘As always it’s a roller coaster for drivers. We should see some further reductions in prices at the pumps as long as the markets don’t turn quickly and fuel retailers grab extra profit.

‘Drivers haven’t seen such prices since 2011 but oil prices are still volatile and more global unrest in oil producing countries can just as easily send the price spiralling again.’

A typical 50 litre tank of unleaded petrol now costs around £2.50 less than it did a year ago and a 55 litre tank of diesel is around £4 cheaper.

Global oil prices have fallen further after the International Energy Agency (IEA) reported higher output and cut its forecast for demand-led growth. But the oil cartel OPEC – the Organisation of Petroleum Exporting Countries - which produces about 40per cent of the world’s crude oil, has so far shown no sign of turning off the tap reducing supply.

Last week, the International Monetary Fund cut its forecast for global economic growth for this year and next, warning that the recovery was ‘weak and uneven’. 

The RAC said: ‘It’s good that prices are coming down but there’s still room for them to come down further. We reckon another 4p. It needs t be passed on to motorists.’

Yesterday Brent crude oil - which is traded in dollars - started the day at $85.50 (£53) a barrel., slumping to below $83.5 (£52) by lunchtime, before bouncing back up towards $85.

In the US oil began at just over $82 (£51), dipped to $80.5 before creeping up to $82.