Motorists across the United Kingdom are being issued a stark warning about fuel pricing, with experts stating that drivers are not seeing fair prices at forecourts despite a significant drop in oil costs.
The Price Discrepancy Exposed
While pump prices did see a modest decrease of around 2p per litre in December, industry analysts argue this is nowhere near enough. The wholesale price of oil fell below $60 a barrel in mid-December, hitting its lowest monthly point in six years. According to the RAC, this should have translated into petrol and diesel prices lower than the 2025 lows of 132p and 138p per litre respectively.
Simon Williams, head of policy at the RAC, expressed disappointment, stating it was "a shame" drivers were not benefiting from substantially lower costs at pumps up and down the country. He highlighted that wholesale fuel costs had dropped below the levels that previously led to the cheapest prices of the year.
Weak Competition and High Margins
The Competition and Markets Authority (CMA) has weighed in, indicating a fundamental problem with market competition. Dan Turnbull, the CMA's senior director of markets, said that fuel margins remain "persistently high" and that operating costs do not justify this. "This indicates competition in the sector is weak – if it was working well, drivers could see lower prices at the pump," he stated.
This analysis was backed by major motoring groups. The AA pointed out a glaring example: since late November, the wholesale cost of petrol paid by retailers crashed by more than 7p a litre. With VAT, this should have meant a saving of 8.4p per litre, or around £4.60 per tank for an average car. Instead, the average pump price fell by just two-thirds of a penny.
An AA spokesperson condemned this practice as "classic 'rocket and feather' pricing at the pumps and the bane of UK drivers," referring to the trend where prices shoot up quickly when oil rises but fall slowly when it drops.
Hope for Change and Regional Differences
There is some hope for improvement in 2026. The Government's fuel finder scheme is set to go live at the start of February, which the RAC hopes will increase transparency and competition, leading to more competitive pump prices.
The scheme follows the model of Northern Ireland, where drivers already benefit from the Consumer Council's Fuel Price Checker. This tool displays live fuel prices across the region, contributing to lower costs. For instance, at the time of the report, unleaded petrol was available for just 125.2p per litre in Carrickfergus, while diesel was cheapest in Newtownabbey at 131.4p per litre.
The message from regulators and motoring bodies is clear: without stronger competition and greater price transparency, UK drivers will continue to pay over the odds every time they fill up their tanks.
