Oil prices are dropping – but suppliers are raking in profits while drivers pay too much.
Pump prices for fuel are still on the increase – even though the cost of oil has fallen by 25% compared to mid-July.
The Daily Mail says that oil companies have not passed on the drop, leading to accusations of profiteering and rip-offs. This week, crude oil prices fell yet again as the market reacted to Hurricane Gustav causing less damage than expected in the Gulf of Mexico production area.
However, according to the AA, pump prices for petrol have this week risen by 0.5p per litre to 112.72p. Spokesman Luke Bosdet said, ‘The wholesale price of petrol has dropped by 18%. Yet the price of petrol and diesel is going up. One has to ask: what is going on?’
Pump prices should have fallen by 8.5p. Petrol retailers are quick to point out that it takes four to six weeks for changes in the cost of crude oil to work their way through to customers. But if that is so, prices should be falling right now.
Asda, Tesco, Morrisons and other supermarket chains have slashed prices at their sites significantly, forcing neighbouring forecourts to cut theirs, too. But elsewhere there’s little change.
Meanwhile, Shell has just announced record half-year profits of nearly £8bn, following BP’s £6.75bn. But the companies deny that their profits are excessive. BP said it was being ‘as competitive as possible and reducing prices when and where it could’.