Commodity speculation blamed for new fuel price rise

A 10-WEEK slump in UK petrol prices has ended as commodity speculation rolled back a third of the recent fall in wholesale petrol costs, according to the AA.

 

Average petrol prices that had peaked at 142.48p a litre in mid-April bottomed out at 130.81p at the beginning of July before regaining more than 1p, according to this month’s fuel price report from the motoring organisation.

 

Petrol pump prices now average 132.18p a litre while diesel is at 137.26p. A month ago, petrol averaged 133.77p a litre and diesel 139.31p.

 

At the bottom of the price slump,UKdrivers should have seen an average saving closer to 14p a litre rather than the actual 11.67p – in effect, short-changing them by a £1 a tank – claimed the AA.

 

From the middle to the end of June, the NW Europe wholesale price of petrol levelled at around the equivalent of 45p a litre, down at least 12p a litre from the peaks in late March and early April. VAT would have extended the fall by a further 2p.

 

NW Europe wholesale petrol prices, which had plummeted from above $1,220 a tonne in early April to around $920 in June, bounced back last week to $1,000.

 

Edmund King, AA president, said: ‘We have seenUKinflation for June fall very close to the Bank of England’s target. It makes you wonder how much closer it would have got had the full extent of lower fuel costs been passed on to drivers.

 

‘Additionally, after the massive boost lower pump prices have given to family budgets and non-fuel consumer spending, it would be extremely disappointing if much of the benefit is lost to commodity speculation.’

 

King added: ‘It was inevitable that pump prices would eventually rise again but, as has been the case so many times in recent years, the questions remain: should it be happening now and what is driving them up? Is it the fundamentals of supply and demand or speculation in the oil and wholesale fuel markets? Current evidence seems to suggest the latter.’

 


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