Oil prices have dropped 5% in the past week thanks to an increase in reserves in the USA leading to hopes for lower pump prices in the coming weeks. At the highest point in the last month, oil sat at $72 a barrel, so the drop to $67 is considerable and very drastic, the steepest drop in six months.
Pump price watchers FairFuelUK say that the pump price could drop by up to 2p a litre for most areas across the UK. Wholesale prices are still on the rise, so it may be a few weeks before we see these savings filter down to the pumps.
Price changes
When the price of a barrel of oil goes up or down it can take up to a month for the changes to be felt at the pumps. If the wholesale price suddenly drops then the price of the pump will drop quicker. It depends on the volume of fuel sold, as the quicker retailers sell fuel the quicker they can respond to price changes. If demand at the forecourt is low then prices will also drop slower.
Many things affect the oil price, from the obvious supply and demand, as in winter demand increases across Europe for heating fuel, to the geopolitical influences such as tensions in the Middle East, trade wars between America and China, America’s sanctions on Middle Eastern countries such as Iran, Brexit (no, we’re not scaremongering but it is an actual thing that affects the buying behaviours on the oil market, especially when new legislation or changes to dates are announced.)
Once the barrel of oil is bought, it is then fractionally distilled and then sold on the wholesale market for companies to buy. Quieter forecourts, or ones with less thoroughfare, will be slower to respond to pump price changes as they cannot buy wholesale fuel as quickly. You may notice a local supermarket forecourt changes it prices much quicker than your small independent garage down the road, as the supermarket’s prices are controlled centrally rather than locally.
Our view
Kitty Bates, consumer spokesperson for PetrolPrices.com says “Oil prices have risen drastically in the past few months but thanks to some external geopolitical factors, as of the beginning of June a barrel of oil is sitting at the $62 dollar mark, almost 10 dollars less than last month. This will carry on to the motorist in the next coming weeks, and as we come into hotter weather, families across Britain will be able to explore the countryside without hurting their income.
Wholesale prices are still on the up, but as it can take up to two weeks for the oil price to transfer through the system we should see a fall at the end of the month, into the beginning of July.
Geopolitical instances such as the trade war between China and America have actually helped to lower oil prices, but the sanctions placed on Iran by America could see much higher pump prices at the end of the year.”
What can you do?
Shop around for prices. You can download the PetrolPrices app and check prices near you on the go. There can be up to a 10p price spread within your area, and the closest isn’t always the cheapest.
Make sure you’re getting the most out of your tank by using some hypermiling techniques. Rolling resistance of a tyre is really important, and by keeping your tyres properly inflated you can maintain a good MPG.
Keeping the engine unclogged by using a tank of premium fuel every 1000-5000 miles, or every 6 months. While premium fuels are unnecessary for most drivers on a regular basis, all cars will benefit from a tank of premium every now and then. The investment now can keep your car running smoothly in the long run, and increase the longevity of the engine and potentially reduce the risk of small errors in the engine.
What do you think of the prices at the minute? Will a pump price drop help you out this summer? Let us know below
Hi
You always find that when the price goes up so does the pump ⛽ go up at midnight the same day or sometimes sooner, but when the price comes down it’ll take upto a week to 10 days for it to arrive at the pumps, it’s a disgrace.
Best Wishes
Ron Jones
YEP, rip off britain…….
A1 Blyth, Notts, 23p a litre dearer than stations within 5miles, if that isn’t greed, don’t know what is (£1 a gallon dearer !!!!)
Just don’t buy it then!! If prices are lower up the road what is your complaint??
ALL service stations along Motorways and major Duel Carriageway have always been at least 20 pence more per litre more expensive. It is ‘captive customers’ just as the food and drinks at services are far more expensive. To clear one thing up, regardless what the pump price is the franchisee running the petrol station at the services will still only be making 2 pence per litre sold. The government take 85 pence in duty, tax and vat, a price that hasn’t changed in 10 years. The rest i.e. 42 pence (ave £1.29 a litre) goes to the fuel company. The only ones who make more money is the fuel company and during the last rises they have made an extra 15 pence on average per litre and since the 5th or May 2019 filling up an average tank of 50 litres means the fuel companies are making an another £7.50 more out of you than they were on the 5th of May.
A certain giant American store is opening one of its cheap gas policy stations in Southampton in August. Thank goodness.
How do you get their gas to your house, where you need it ?
All petrol stations should be independent as in the USA and suppliers should be just that – nothing more, with no control over forecourt pricing. As numerous others have already stated – when the oil price goes up – pump price is immediately raised but when oil prices drop pump prices take ages to drop – usually after lots of complaints from organisations like Petrolprices.com. Their excuse for not dropping the price immediately is that they are still selling fuel stored, previously bought at the extra premium – but if /when bought cheaply do they keep selling stored fuel at the cheaper price? – no price goes up immediately.
A petrol station has to pay for the fuel on delivery so that its tanks are full at that current price. If the price drops then the decrease will not happen till the next delivery. It is explained in the story above and that is why supermarkets have quicker price changes than the small retailer.
The only thing wrong with the comment about the smaller garages is the biggest con merchants out there are the big boys and that includes the supermarkets. We have five Tesco’s near us and very rarely are they charging the same price Also the same applies to Asda
Why would large petrol retailers drop the price of fuel at the pump…..it’s more profit for them and even though the price per barrel drops the customer at the pump always suffers
The price of fuel in Spain has already dropped by 2 cents a litre this week, diesel at our local pump is 112.9 cents a litre, some 30% cheaper than the UK, however unleaded is 10 cents a litre more expensive in Spain, wonder if this will change as Spain are also forcing the change from diesel to unleaded, at the moment I estimate 80% of cars are still using diesel. Happy motoring and reduction in fuel prices both her in Spain and the UK is a welcome, you just need to be very patient for the UK oil companies to pass on the saving they make, good luck.
Is the duty on diesel lower than petrol by any chance?? It is in many European countries but not here. Explains a lot, including the much higher proportion of diesel vs gasoline in such countries
I’ve just got back from Myanmar & the price per litre of diesel in Yangon was 1000 Kyat equivalent to 50p a litre ……… 🙄
Son in Thailand says it’s around 76p a litre there at the moment.
The diesel car which is eat6 which I have on the automatic is cleaner than the new petrol engines coming out now, I am waiting for my new car which is eat8 automatic which is even cleaner again.
All the people changing to petrol going to have less miles a gallon, I am getting near 600 miles on a full tank compared to someone which as a petrol getting around 400 miles.
Some people have been sucked in to buying a petrol car because they think a diesel car is bad.
I live in France half the year. Fuel prices change every day, reflecting the oil price or dollar/euro exchange rate up or down. No excuses for a delay. There is no reason why the UK can’t do the same, expect profiteering
More chance of me being first man on Mars.
But prices are as high now as when oil was over $130 a barrel so who is ripping us off?
Exactly what I thought. It’s time to buy an electric car.
The market is full of oil futures traders rigging the game. As mentioned pain is passed on very efficiently, relief is for the traders, and NOT THE MOTORIST!!
I drive a diesel car and the price of fuel has risen 5 or 6 times in as many weeks. A decent price reduction would be very welcome, but I won’t hold my breath.
Hi,
Went to Tenerife a week ago and the fuel price i could not belive diesel price worked out at 83 pence per ltr and petrol 93 pence, why when they import everything. so why is it so expensive in the UK.
thanks
Graham Hawkes
They probably don’t rip their people off to the tune of 70 pence tax on every £1 of fuel bought eh Graham ?
Simple, their fuel is not taxed as heavily as ours.
Simple who are the biggest rip off merchants in the UK irrespective of which party are in power you guessed the government.
Followed by big business and there is nothing new in that.
No need to worry, OPEC will simply reduce output to keep the price high.
There’s an old say about fuel prices – ‘Goes up like a rocket, comes down like a feather’. Prices go up almost immediately, when they do come down, it can be up to a month.
As per usual prices go up immediately when crude goes up but it takes weeks to come down, reading a different news story yesterday, crude has been dropping for the past 3 months yet prices at the pump have been going up??
From what I recall, crude is cheaper now than it was years ago when the price at the pump broke the £1 a litre Mark yet we are paying £1.30ish now and fuel duty has been frozen for years so someone is making a good profit.
I Just wonder when there are no more petrol and diesel cars around, where will the government get there billions of pounds in tax from? Goodness knows what the price of electric will be
Good point, and then of course those higher prices will be paid by everyone, including those people still driving a petrol or diesel car, because they can’t afford an electric one.
Simple, it’ll be a pay as you drive system, the Government have already confirmed this
“When the price of a barrel of oil goes up or down it can take up to a month for the changes to be felt at the pumps”
Rubbish! If the price of oil goes up, the cost of fuel shoots up the next day. If the cost of oil comes down, it takes weeks to have any effect at the pumps!
What’s the price of crude oil ever had to with the price of petrol?
To clear one thing up, regardless what the pump price is the franchisee running the petrol station at the services will still only be making 2 pence per litre sold. The government take 85 pence in duty, tax and vat, a price that hasn’t changed in 10 years. The rest i.e. 42 pence (ave £1.29 a litre) goes to the fuel company and during the last rises they have made an extra 15 pence on average per litre. since the start of May filling up an average tank of 50 litres means the fuel companies are making an another £7.50 more out of you today than they were at the start of May. That £7.50 would have got you another 5.81 litres or on average another 36 miles driving.
The government forces the retail price high so that they can get more tax .
I really won’t hold my breath, despite the drop in the price of crude, fuel in my area actually INCREASED by 2p per litre this week.
I wonder if anyone could produce a chart comparing the price of crude with the price at the pumps over the past 10 or 15 years. I think it would tell a bit of a story.
The price of fuel will not drop, irrespective of how much the oil price plummets. It’s profiteering, plain and simple. The average motorist is a soft target, that will always be in the sites of the government, and oil companies.
It’s called capitalism. Would you prefer communism? Just like any other business, oil companies are trading to make profits. What’s wrong with that? If they didn’t they’d go bust. They will charge what the market will stand. Get used to it. Over half the pump price of fuel is tax anyway.
One of my big complaints apart from high prices is how can petrol prices have decimal parts of a pence, consumers cannot get any decimal change.
Why haven’t the transport industry got involved with these price increases.
I can see the future that with the price of Oil going up when supplies get short we won’t be able to afford to run a combustion engine car. Prices will also go up with most cars being electric so to make it worth it you pay a premium to drive combustion.
But as most cars just sit around until you drive them it will be too expensive to own a car and with driverless cars we will be using driverless cars that you order like Uber as it will be cheaper and easier. We won’t have to worry about the price of a barrel of oil or even driving tests.
When I worked for a major oil company and there was a budget we had to brim our tanks then usually at 18:00 hrs the price was put up. Nice little earner and possibly fraud as the duty is paid when the fuel leaves the depot not sold at the pump.