The government has urged petrol retailers to cut prices to bring them in line with plunging oil costs.
Danny Alexander, the chief secretary to the Treasury, said he would write to fuel suppliers as Asda became the latest supermarket to reduce forecourt prices to what it claimed was the lowest level in four years.
Alexander said consumers would “rightly be angry” if they felt pump prices were not reduced as much as they should be, as wholesale oil prices had fallen by a quarter to $82 (£52) a barrel while average petrol prices had been cut by barely 6% to 124p per litre.
“I believe it’s called the rocket-and-feather effect. The public have a suspicion that when the price of oil rises, pump prices go up like a rocket. But when the price of oil falls, pump prices drift down like a feather,” said Alexander.
“This has been investigated before and no conclusive evidence was found. But even if there were a suspicion it could be true this time it would be an outrage,” he added.
But the RAC motoring organisation accused Alexander of “passing the buck” noting that despite a freeze on fuel taxes they still accounted for 63% of the cost of a litre at the pumps. Edmund King, the president of the rival AA, also called on ministers to do more.
He said: “First, policies to help strengthen the pound by just 10 cents against the dollar would double the potential for a 2p-a-litre fall in the price of petrol to 4p. Secondly, the government’s failure to introduce fuel price transparency, showing the relationship between oil, wholesale and pump prices, has helped no one.”
The AA believes that the average price of unleaded petrol is 124.22p but says prices vary across the country with much higher charges in more remote rural areas.
Asda, which has 233 forecourts and almost 7% of the fuel market, has announced it will cut 1p per litre from its national price of unleaded petrol and diesel starting on Friday, bringing the price down to 119.7p and 123.7p respectively.
“Asda has led and will continue to lead on these price cuts as we know how important it is that we pass savings straight back into drivers’ pockets as soon as prices fall.
No matter where customers live, they will benefit from the same fuel price with our national price cap of 119.7p for unleaded and 123.7p for diesel,” said Andy Peake, Asda’s petrol trading director.
Tesco, the UK’s biggest petrol retailer with 499 outlets and more than 16% market share, cut petrol and diesel by 1p a litre at all of its petrol stations from lunchtime on Thursday.
“This is part of our continuing efforts to pass on savings to customers and help bring down the cost of living. We also offer Clubcard points and savings through Clubcard Fuel Save, which saves our customers up to 20 pence per litre,” said Peter Cattell, fuel director for Tesco.
The price of oil has slumped since June due to soaring production from the US shale fields combined with lower demand as global economic growth has faltered. But lower prices may be temporary, according to the Organisation of Petroleum Exporting Countries (OPEC).
The oil cartel’s annual World Oil Outlook, published on Thursday forecasts crude values will remain at around $110 a barrel for the rest of the decade, rising to $124 by 2025 and $177 by 2040.
The problems of high petrol prices are not just affecting Britain. The BBC reported that Russian state inspectors have opened an inquiry into Russian oil firms suspected of market rigging to push up petrol prices nationally.
The Federal Anti-Monopoly Service is said to be investigating Bashneft and Lukoil – both privately-owned – as well as Rosneft which is 20% owned by BP.
theguardian.com/
Danny Alexander, the chief secretary to the Treasury, said he would write to fuel suppliers as Asda became the latest supermarket to reduce forecourt prices to what it claimed was the lowest level in four years.
Alexander said consumers would “rightly be angry” if they felt pump prices were not reduced as much as they should be, as wholesale oil prices had fallen by a quarter to $82 (£52) a barrel while average petrol prices had been cut by barely 6% to 124p per litre.
“I believe it’s called the rocket-and-feather effect. The public have a suspicion that when the price of oil rises, pump prices go up like a rocket. But when the price of oil falls, pump prices drift down like a feather,” said Alexander.
“This has been investigated before and no conclusive evidence was found. But even if there were a suspicion it could be true this time it would be an outrage,” he added.
But the RAC motoring organisation accused Alexander of “passing the buck” noting that despite a freeze on fuel taxes they still accounted for 63% of the cost of a litre at the pumps. Edmund King, the president of the rival AA, also called on ministers to do more.
He said: “First, policies to help strengthen the pound by just 10 cents against the dollar would double the potential for a 2p-a-litre fall in the price of petrol to 4p. Secondly, the government’s failure to introduce fuel price transparency, showing the relationship between oil, wholesale and pump prices, has helped no one.”
The AA believes that the average price of unleaded petrol is 124.22p but says prices vary across the country with much higher charges in more remote rural areas.
Asda, which has 233 forecourts and almost 7% of the fuel market, has announced it will cut 1p per litre from its national price of unleaded petrol and diesel starting on Friday, bringing the price down to 119.7p and 123.7p respectively.
“Asda has led and will continue to lead on these price cuts as we know how important it is that we pass savings straight back into drivers’ pockets as soon as prices fall.
No matter where customers live, they will benefit from the same fuel price with our national price cap of 119.7p for unleaded and 123.7p for diesel,” said Andy Peake, Asda’s petrol trading director.
Tesco, the UK’s biggest petrol retailer with 499 outlets and more than 16% market share, cut petrol and diesel by 1p a litre at all of its petrol stations from lunchtime on Thursday.
“This is part of our continuing efforts to pass on savings to customers and help bring down the cost of living. We also offer Clubcard points and savings through Clubcard Fuel Save, which saves our customers up to 20 pence per litre,” said Peter Cattell, fuel director for Tesco.
The price of oil has slumped since June due to soaring production from the US shale fields combined with lower demand as global economic growth has faltered. But lower prices may be temporary, according to the Organisation of Petroleum Exporting Countries (OPEC).
The oil cartel’s annual World Oil Outlook, published on Thursday forecasts crude values will remain at around $110 a barrel for the rest of the decade, rising to $124 by 2025 and $177 by 2040.
The problems of high petrol prices are not just affecting Britain. The BBC reported that Russian state inspectors have opened an inquiry into Russian oil firms suspected of market rigging to push up petrol prices nationally.
The Federal Anti-Monopoly Service is said to be investigating Bashneft and Lukoil – both privately-owned – as well as Rosneft which is 20% owned by BP.
theguardian.com/
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