Fuel price transparency is “accelerating” pump price cuts, as wholesale oil costs continue to fall after the US and Iran agreed a deal to end their conflict, according to the AA.
Wholesale costs for petrol began dropping last month, falling from 119.5p a litre – before retailer margin and VAT – at the end of May, and a further 3p since the US-Iran peace deal was announced.
The AA said the fall in wholesale costs was already showing at the pump, with prices dropping quicker than normal.
Since peaking at 159.7p a litre on 28 May after the outbreak of war, the average petrol pump price has fallen by almost 4p to 155.9p.
AA spokesman Luke Bosdet said the pricing behaviour highlighted the “power of Fuel Finder”.
He added there had been some early signs that the government’s Fuel Finder scheme was boosting competition.
In April, motorway service areas were charging around 185p a litre for petrol. In early May, there was a surge in the wholesale cost after the failure of a ceasefire and the closure of the Strait of Hormuz, the AA said.
Motorway service stations, however, dropped their petrol prices below 180p a litre and, today (16 June), service stations such as Chieveley on the M4, which were “normally expensive”, are charging 175.9p.
Diesel, meanwhile, which was averaging 184.4p per litre on 28 May, reached 176.7p yesterday, amounting to a 7.7p drop.
“My feeling is that not only has there been downward pressure on pump prices that have already been showing in June, but Fuel Finder’s pump price transparency is now exerting a strong influence on pump prices and has accelerated the reductions,” said Bosdet.
“We think that is the power of Fuel Finder. Fuel stations seeing wholesale costs fall are now competing strongly for summer trade because they and their customers can see what cheaper rivals are charging.
“However, before everyone gets excited, before Covid, the Ukraine war and the Middle East conflict, the worst the UK driver had ever suffered was petrol at 142.5p a litre in April 2012. Road fuel is still very expensive.”
The government officially launched its Fuel Finder scheme in February, requiring all UK forecourts to report changes to pump prices in real time to boost transparency and competition. The CMA, however, only began actively enforcing the scheme in May, having initially focused on supporting businesses with compliance.
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