Petrol retailers reducing prices

‘The price of fuel at the pump is influenced by a range of factors beyond just the price of a barrel of oil, but despite this forecourt retailers have still managed to reduce the cost of fuel to the motorist at the expense of their own profit margin during recent weeks,’ said Ray Holloway, Director of the RMI Petrol Retailers Association (PRA).

Holloway continues: ‘Prices for crude oil and forecourt fuel are obviously linked but they do not move in tandem. Therefore they do not automatically move up or down at the same time.’

According to Holloway, while the price of oil has fallen, the wholesale price of petrol that retailers pay for petrol has remained static: ‘Between 1 August and 12 September, the price of a barrel of crude oil fell by 20.1 per cent from $122.50 to $97.90. In the same period the cost of petrol supplied to retailers did not change. Despite this, retailers were able to drop the average retail pump price of petrol from 116.1 pence per litre to 112.8 pence per litre.

International currency exchange rates also have an impact. Holloway explains: ‘All oil products are priced in US Dollars therefore exchange rate variation impacts on the retail pump price. If the exchange rate of 1 August (£1.974 to $1) applied on 12 September (£1.792 to $1) motorists would be paying approximately five pence less for each litre.’

Holloway believes that the price of fuel will decline during the autumn: ‘If there are no unexpected events in the areas of crude oil production or refining and currency exchange rates now remain relatively stable, UK motorists can expect forecourt prices to fall though until the end of October. There is evidence that this is beginning to occur and should be obvious on forecourts across the UK within the next 10 days.’