The RAC has said that David Cameron’s comments on lowering fuel prices are unrealistic and could mislead motorists.
The prime minister said yesterday that prices at the pumps should “fall further and faster” as oil prices continue to plummet.
But the motoring organisation warns that, although many retailers have been passing on savings, there is not a direct relationship between the cost of crude oil and the prices we pay on petrol station forecourts.
RAC fuel spokesperson Simon Williams said: “While there is no indication that oil production will be slowed to stabilise the barrel price, there is a limit to which further falls can benefit pump prices.
“The huge elephant in the room here is tax – we are at the point where fuel duty and VAT together represent 70% of what we pay when filling up. The fact is that £42 of a £60 fill up is tax – £32 duty and £10 VAT, with the cost of producing fuel, delivery and oil company and retailer margins accounting for just £18.”
The return of the £1 litre
A petrol station in the West Midlands his the headlines yesterday when it became the first to reduce the cost of petrol back below £1 per litre.
Williams added: “We predicted at the start of December that we would see the price of petrol drop to £1 per litre, which has now happened in some places, and retailers up and down the country deserve recognition for their willingness to pass on these savings.
“So long as oil prices stay low, and the pound remains stable against the dollar, we could see competitive retailers reducing the price to nearer 95p per litre in the next few months.”
How much does petrol cost in your area? Let us know by commenting below.