The increase in petrol prices could “grind to a halt” this week – despite the fuel reaching a record 185p a litre over the weekend – as wholesale prices fall.
The average price of petrol reached 185.04p for the first time on Sunday, while diesel reached a record of 191.03p on Saturday.
Fuel prices have been on a relentless march over the past week, piling pressure on household and business budgets.
Petrol prices: Kwasi Kwarteng orders inquiry into cost of filling upRead more
However, the AA said some respite might be in sight for drivers. The motoring group said the wholesale price of petrol – which has risen significantly since Russia’s invasion of Ukraine – has been lower than its pre-jubilee peak for more than 10 days.
The AA’s fuel price spokesperson, Luke Bosdet, said: “Petrol price rises should be grinding to a halt, at least temporarily, by the end of the week. There may still be some forecourts yet to pass on the recent surge in costs.
“If they continue to go up substantially afterwards, we will be intrigued to hear what excuses the fuel trade has this time.”
On Monday, the UK’s competition watchdog confirmed it would launch a “short and focused review of the market” after the business secretary, Kwasi Kwarteng, asked it on Sunday to urgently review petrol station operators, amid concerns that retailers have not passed on the recent cut to fuel duty.
In a letter to the Competition and Markets Authority, Kwarteng wrote that people were “rightly frustrated” that the 5p-a-litre reduction had not stopped prices from soaring to record levels at forecourts.
Petrol retailers have been accused of profiteering but said on Monday they had been “unfairly scapegoated” over the rising prices at the pumps. They argue that their margins are thin and oil refineries are taking a larger cut than before the Ukraine war.
Gordon Balmer, the executive director of the Petrol Retailers Association, said: “The briefings provided by government spokespeople to the media indicate that ministers do not understand how fuel prices are set. We have contacted [Kwarteng] on multiple occasions offering to meet and explain fuel pricing. However, we are yet to receive a response.
“By law the 5ppl fuel duty cut has to be passed on – and it has been. Petrol retailers have been unfairly scapegoated for rises in the wholesale price of fuel over which they have no control …
“If the government wants to ease the burden of pump prices on motorists, they should cut fuel duty by a much more substantial margin, just as many other governments of European countries have done.”
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The rising cost of diesel is also a concern for the health of the economy amid fears of a recession, as it is widely used by businesses to fill vans and trucks.
The RAC fuel spokesperson, Simon Williams, called on the government to intervene to “ensure drivers don’t endure a summer of discontent at the pumps”.
He added: “We hope the government’s persistent talk about the importance of retailers passing on March’s 5p duty cut fully is a precursor to an announcement of a deeper cut this week.
“If that’s the case, it’s very welcome, albeit overdue as the 5p cut has been well and truly overtaken by events on the wholesale market since then.”