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RAC calls for lower petrol prices as oil falls further

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RAC calls for government scrutiny of petrol prices, as oil falls further
Fuel retailers will 'lose credibility' if they refuse to cut prices this week, the RAC has claimed. Photo: PA

The RAC has called on retailers to cut prices at the pump, as its Fuel Watch barometer highlights the falling cost of oil.

The data shows the price of oil fell by $10 a barrel to $73.18 (£54.78) on Friday on top of already lower wholesale prices meaning petrol is now around 12p a litre too expensive while diesel is 10p too high, the motor company said.

Unleaded is currently at an average of 147.64p a litre and diesel is 150.85p. However, if the biggest retailers reflected the downward movement in the wholesale market, prices should be 135p and 141p respectively, it added.

On Tuesday Brent crude (BZ=F) was trading 2.9% lower by mid-morning, hitting $71.30 a barrel off the back of fears of vaccine efficacy against the new Omicron variant of COVID-19. Crude (CL=F) was also down 2.3% to trade at $68.35 per barrel.

Watch: Surging energy and fuel costs push inflation to near-decade high

The RAC said retailers could risk losing "all credibility" with drivers if they do not act soon on price cuts, following record rounds of price bumps for drivers in recent months.

When wholesale prices go up, retailers routinely increase their own charges to consumers daily.

The new variant of COVID-19, Omicron, led to a large drop in oil prices, as traders weighed the risks of further lockdowns over the winter period. At one point during previous lockdowns oil prices had tipped into being almost worthless due to a lack of demand from industry and the travel sector.

Read more: EasyJet bookings hit by Omicron variant as losses total £1bn

“While retailers might resent the RAC pointing out that their fuel is overpriced, this doesn’t change the fact that they should cut," said RAC fuel spokesperson Simon Williams. "And if they don’t, we feel they will lose credibility with drivers, although it’s very difficult for motorists to vote with their feet because they have nowhere else to go."

“If a substantial cut doesn’t materialise, we feel this is worthy of government scrutiny as there’s no public body monitoring fuel prices to see if they’re fair."

Watch: What is inflation and why is it important?

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