Cost of filling a tank falls by £5 in July

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The value of petrol fell in July, knocking nearly £5 off the price of filling a tank, in line with the RAC.

Average petrol costs dropped by nearly 9p over the month to 182.69p per litre, whereas diesel fell by almost 7p to 192.38p per litre.

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But the motoring group warned the reductions nonetheless do not pretty mirror the autumn within the wholesale value of gasoline.

It mentioned main retailers ought to be slicing pump costs a lot additional.

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Fuel costs have soared in current months, pushed by the struggle in Ukraine and strikes to cut back Europe’s dependence on oil from Russia, a serious provider.

With meals and power payments additionally surging, many households are feeling monetary pressure.

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Wholesale petrol costs peaked initially of June, however have since fallen as the worth of oil has dropped again. Fears of a recession within the US and elsewhere have hit demand for oil, and the worth of Brent crude – the worldwide benchmark for oil – has fallen to round $100 a barrel, after hovering when Russia invaded Ukraine.

‘Falling too slowly’

The RAC mentioned nearly £5 was shaved off the price of a 55-litre tank of petrol in July, from £105.29 right down to £100.48, as retailers lowered their costs.

The value of filling up a diesel tank dropped by £3.68 over the month.

These are the third and fourth greatest month-to-month reductions, respectively, within the final 20 years.

However, the RAC says the falls are nonetheless too sluggish, given the numerous reductions within the wholesale value of gasoline.

Wholesale petrol costs have fallen by 20p during the last eight weeks, whereas the typical value paid for unleaded by drivers has solely dropped by 9p in July.

Based on common wholesale costs final week, the RAC says petrol ought to be round 167p per litre, not 183p.

It warned that the failure of main retailers to slash petrol pump costs in step with the autumn in wholesale prices of unleaded is costing drivers, who’re paying nearly £9 a tank greater than they need to be.

RAC gasoline spokesman Simon Williams mentioned the most important retailers ought to have “cut their prices more significantly on a daily basis”, given the regular and constant fall within the wholesale value of petrol.

He mentioned their unwillingness to do that made July “an unnecessarily tough month for drivers”.

However, some gasoline analysts argue that’s not a good comparability.

“Over the last eight weeks, prices have jumped around; it’s understandable if retailers have tried to smooth those differences out in their prices,” mentioned Steve Irwin, Director at Portland Analytics.

“There is often a lag between wholesale prices dropping and a drop in prices at the pump. I expect we will see further price drops in petrol in forecourts over the next week or so of a further 5, 6 or even 7p a litre.”

While the drop in petrol costs is nice information for drivers, Mr Irwin warned it isn’t essentially a very good signal for the financial system.

“The market is clearly worried about a downturn, with people cutting back this autumn and winter, and that is being factored into the wholesale price,” he mentioned.

“If signs of that downturn don’t materialise, prices may go back up again. If the market thinks they are, they could fall further.”

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