UK motorists won’t make most of drop in oil prices due to weak pound
Drivers will not make most of oil prices falling due to the pound’s ongoing drop against the dollar.
Oil prices have dropped to the lowest since January following recession fears in the UK but, as Brent Crude is priced in dollars, any change in the exchange rate is automatically passed on to motorists.
Data from the AA showed that drivers are paying £5 more to fill up a 55-litre car than they would, due to the link between the price of oil and the dollar.
According to figures, petrol prices per litre would be 9p cheaper if the pound had not slumped and maintained its February value of $1.35.
As the pound on Friday slumped below $1.10 – the lowest since 1985 – petrol prices are set to be hit further.
“Oil and fuel on commodity markets are traded in dollars, which makes the weaker pound very bad news for motorists,” said the AA’s fuel spokesperson Luke Bosdet.
“The price of oil is back to the level at the start of the Ukraine war but petrol is 15p a litre more expensive.
“Two-thirds of that higher cost is down to the weakness of the pound.”
Earlier this week, motoring group RAC called on the Big Four supermarkets to pass on the drop in wholesale prices to drivers.