Why have fuel prices not dropped in line with the barrel cost?
Why is the price of petrol and diesel still the same at the pumps when crude oil has dropped from $115 a barrel in June to its current price of $97?
Kevin Caulfield (Kildysart)Sep 2014 Filed under: fuel prices
Expert answer
Hi Kevin,
We've done a bit of digging into this and... there is no good answer. As a general rule of thumb, a USD$2 fall in the price of a barrel of oil should translate into a fall in the price at the pump of between 1.5c and 2c. Since June, the price of a barrel has fallen by, as you point out, USD$18 so where's our 18c cheaper litre of petrol? Answer: no-one's saying.
All the oil industry analysts are pointing to a weaker global price for crude oil, in spite of the recent and current turmoil in the Middle East. US reserve stocks are up, usage in China is down a little, all of which puts the price of oil under pressure.
In fact, the price of a litre of petrol in the UK, which takes its feed from the same Brent Crude contract as us, has fallen by a few pence per litre recently, but in Ireland the price has actually gone up by 2c on average. Inflation? Nope, that's not the cause - the Central Statistics Office has inflation pegged at a lowly 0.4 per cent right now.
So, are the oil companies and distributors just gouging us? Possibly, yes. None of those contacted for an explanation deigned to respond, and there has been no increase in fuel duty nor carbon tax from the government side so the only logical explanation left is... yup, gouging.
All we can suggest is to do the usual - shop around and try and find the best price you can. There's no point in popping across the border, sadly - the UK's price of around STG£1.29 for a litre of petrol equates to around €1.64 and that's before bank transaction charges.
Come on Apple Green, Texaco, Maxol, Topaz et al; your input cost has fallen significantly. Why aren't we consumers getting the benefit?
Neil Briscoe - Complete Car Adviser@neilmbriscoe