RAC calls for petrol to be cut to 114p a litre for Christmas
Fuel retailers expected to pass on wholesale savings to make Christmas cheaper for motorists
The RAC is urgently calling on fuel retailers to pass on further savings in the wholesale price brought about by the continued fall in world oil prices. This overdue cut would reduce the biggest cost of motoring just in time for Christmas.
The RAC’s monitoring of fuel prices shows there is scope for the price of a litre of petrol to come down by more than 7p a litre and diesel to drop by nearly 6p, bringing the average price of a litre of petrol to 114p and diesel to 120p – prices last seen across the country in March 2010. Currently, the average price of petrol stands at 120.84p, with diesel at 125.43p whereas at the start of the year petrol was 130.79p a litre and diesel was 138.24p.
In June this year a barrel of crude reached a 2014 high of $115.36 – and the highest price since September last year – but since then it has fallen dramatically. As of Thursday 4 December it stood at $68.59 which is $46.77 less. And, while the falling oil price has been reflected at the pumps by retailers consistently reducing forecourt prices, the latest savings in the wholesale price need to be passed on quickly to demonstrate transparency.
Despite the price of oil coming down the dollar has gained on the pound which has somewhat lessened savings at the pump for motorists due to fuel being traded in dollars per tonne. The pound reached a year high in early July at $1.70.
RAC fuel spokesman Simon Williams said: “The tumbling oil price, coupled with a pound that is still strong against the dollar, have led to a phenomenon that many motorists are pretty unfamiliar with – falling pump prices. The forecast reduction that retailers should be passing on is the biggest the RAC has seen in recent years, even since petrol began to come down from its record high of 142.48p a litre on 17 April 2012 (diesel 147.93p – 13 April 2012).
“Retailers now have a very reasonable record on transparent pricing so we have no reason to believe that they will not pass on the savings in the wholesale price, we just urge them to do it sooner rather than later to make the point very clearly to motorists that they operate a fair pricing system.
“If they do, we could well see petrol pump prices fall by well over 7p a litre in the next few weeks and diesel by almost 6p a litre.
“With this kind of drop in the national average prices, motorists will no doubt see some very low petrol prices – perhaps under 110p a litre from retailers who pride themselves on having the lowest prices.
“At a petrol price of 114p a litre motorists would be saving over £9 (£71.93 down to £62.70) on filling up an average 55-litre family car compared to the beginning of the year, £10 for a diesel at 120p a litre (£76.03 down to £66). This will be very welcome news just in time for Christmas when household budgets are really stretched. It should also be another boost for business as it will lower operating costs substantially.
“While motorists are enjoying much lower forecourt prices it’s important to recognise that they will always be limited by fuel duty, which represents nearly 58p in every litre, and VAT which is charged on top, at around 20p a litre. A driver filling up a 55-litre petrol car at 114p a litre would therefore pay £62.70 of which £31.87p would be duty, £10.45 VAT and only £20.38 for the fuel itself.
Ends
If you are a journalist and would like further information, please contact:
RAC press office: Simon Williams – 0161 452 4242 / 07725 822107 / simon.williams@rac.co.uk
Notes to Editors
About RAC
With more than eight million members, the RAC is one of the UK's most progressive motoring organisations, providing services for both private and business motorists. Whether it's roadside assistance, insurance, buying a used car, vehicle inspections and checks, legal services or up-to-the-minute traffic and travel information – the RAC offers a solution for all motoring needs. The RAC is committed to making motoring easier, safer, more affordable and more enjoyable for drivers and road users.
The RAC is the motorist’s champion and campaigns to support the interests of its members and UK motorists at a national level, including advancing levels of road safety, supporting the needs of young drivers and voicing concerns about the increasing cost of motoring. The RAC’s annual Report on Motoring survey, now in its 25th year, provides a clear insight into the concerns and issues facing today’s motorists.
For the very latest news on UK fuel prices visit our Fuel Prices Explained pages – www.rac.co.uk/advice/fuel-prices-explained. Here we detail the average UK price of petrol and diesel and give an indication of which way prices are likely to go – up or down – over the next couple of weeks based on the wholesale price. You can also discover more about the fuel industry, what affects UK fuel prices, how they compare those in Europe, how motorists are taxed and top-tips for better fuel economy.
The RAC supports FairFuelUK campaigning for fairer taxes on petrol and diesel. Show support and find out more at www.fairfueluk.com.
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