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The AA says petrol prices are 'slow to fall'

Category: Business

Published: 19th Feb 2010 12:09:14

Petrol prices have stagnated in the last month despite a fall in the wholesale cost, the AA has said.

The motoring organisation said that the average petrol price had stayed at around 112 pence a litre, despite a 2p drop in wholesale prices.

It suggested that supermarkets, which have generally led price falls, had been slow to cut the cost.

And it warned that the longer-term prospect for motorists was an upward trend in the cost of fuel.

Diesel prices remained at around the 114p a litre mark, the AA's fuel price report found.

'Brief respite'

Some supermarkets were now offering a litre of petrol at prices below 110p, the report found, although the cost could be more than 10p a litre higher in motorway service stations.

Motorists in Yorkshire and Humberside benefit from the lowest prices in the UK on average for both forms of fuel, with drivers in Northern Ireland facing the highest costs.

"We know from our research that £1.10 a litre is when driver tolerance of higher fuel prices begins to evaporate, and £1.12 may have been sufficient for many car owners to reconsider who they buy their fuel from," said AA president Edmund King.

"The AA fears that the recent fall in the wholesale price is only a brief respite."

Higher petrol prices were part of the reason for the sharp increase in the UK inflation rate to 3.5% in January - the fastest annual pace for 14 months.

The VAT rate returning to 17.5% was also highlighted as part of the cause.

Source:
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BBC News, 2010. The AA says petrol prices are 'slow to fall' [Online] (Updated 19th Feb 2010)
Available at: http://www.ukwirednews.com/news/38543/The-AA-says-petrol-prices-are-slow-to-fall [Accessed 23rd Apr 2014]

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