Pump prices have remained relatively stable despite a significant drop in wholesale fuel costs, according to the latest report from the AA.

The motoring association noted that the wholesale price of petrol has reached its lowest point since 2021, before the conflict between Russia and Ukraine led to a surge in prices. This decline in fuel costs follows a decrease in oil prices to under $60 per barrel, driven by progress towards a potential peace agreement between the two nations. Analysts predict an oversupply in the oil market for the upcoming year.

Although garages have seen a more than 7p per liter reduction in petrol costs since mid-November, drivers have not yet experienced substantial savings at the pump. The national average petrol price stood at 137.3p per liter this week, only marginally lower than the beginning of December.

The AA estimates that if the full wholesale price reduction had been passed on to consumers, drivers could have saved approximately £4.60 on a typical 55-liter tank fill-up. Similarly, diesel prices have seen a modest decline from 146.9p to 146.6p per liter over the same period.

As many motorists prepare for holiday travel, the AA highlights the discrepancy between wholesale and retail fuel prices, suggesting that drivers may be missing out on potential savings during the festive season. The association expressed concern over the delayed reduction in pump prices, hinting at a possible lack of transparency in pricing strategies.

The Competition and Markets Authority previously raised alarms about inflated fuel price margins, signaling ongoing scrutiny of the industry’s pricing practices. Retailers have been urged to pass on cost savings to consumers, particularly as the holiday season approaches.

Gordon Balmer, from the Petrol Retailers Association, emphasized that reductions in wholesale fuel prices are gradually being reflected in pump prices, offering some relief to motorists as they hit the road.