Monday, 24 November 2014

Where are our savings?

The AA reports that although the cost of petrol has fallen by around £2.37 a tank over the course of the last month, we motorists aren't seeing the full savings from the huge drops in the cost of a barrel of oil during the same period.

Per barrel, the cost of oil has dropped by over 11% over the last six weeks, meaning that in theory it should cost the same to fill up as it did back in 2010, when the price was the same.  Despite the introduction of the new VAT rate in 2010, the cost per litre is still 1.5p more than it should be.

Although many (including the Government) are pointing their fingers at the retailers (i.e. the forecourts), even the boss of the AA, Edmund King, is left feeling in the dark, stating that,
European motoring organisations, representing 35 million motorists, still haven’t had a satisfactory answer as to why petrol's commodity price hit $1200 a tonne with oil at $147 a barrel in 2008 but then returned to $1200 in 2011 with oil at only $125 a barrel.
If King is feeling that there should be more transparency in the industry (from producers all the way to retailers), what chance is there for us motorists to understand why we're not seeing some of our hard-earned cash make our way back into our pockets?  And if there is so much confusion as to who is to blame, surely we're more likely to dismiss it as 'fluctuations' in market forces.

One thing's for sure - we NEED more transparency throughout the system, and motorists need some answers.

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