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Fuel Price Misery: AA Demands Action

(c) Sky News 2012

The AA has accused ministers of failing drivers and businesses by failing to clamp down on what is sees as unfair fuel prices.

The motoring group says while average unleaded prices have gone down from 138.95p a litre in mid October to 135.08p - with diesel dropping from 143.74p to 141.89p - motorists are still being short-changed.

It believes the fall in wholesale petrol prices across Europe (Chicago Options: ^REURUSD - news) should have knocked UK pump prices down by between 10p and 11p a litre instead of by an average 4p.

Despite the signs that the Chancellor is poised to postpone the planned fuel duty rise of 3p a litre due in January, the AA said drivers were facing a series of pressures including a "postcode lottery" in fuel prices.

It found that motorists in one area can be charged as much as 5p a litre more than drivers a few miles away.

AA president Edmund King said: "The Government momentarily had a grip of this monster when the previous Transport Secretary (Justine Greening) called in the industry to agree wholesale price transparency.

"This initiative stalled when the Office of Fair Trading (OFT) called for information on road fuel pricing - to which the industry has responded by pumping up wholesale prices and then not passing on cost savings in a timely fashion.

"The average UK domestic energy bill is £1,252 but the cost of fuel for the average car consuming 1,200 litres a year is over £1,500.

"This week the Government said it was going to tackle high gas and electricity bills, yet lets drivers and businesses down by not reacting swiftly to runaway wholesale and pump prices."

Earlier this week, Treasury Economic Secretary Sajid Javid said the Government understood the pressures facing households and was determined to help with the cost of living.

He said: "The Government is doing all it can to help hard-working families with the cost of living and putting money back into their pockets.

"Action on fuel duty is part of this. Fuel duty is currently 20% lower in real terms compared to its peak in March 2000 and 7% lower compared to May 2010."

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