Drop in price of petrol provides motorists with a Christmas gift

Petrol prices have fallen to their lowest level on average for more than two years, as reported by the RAC.
A litre of unleaded petrol costs on average £1.43p a litre, a price last seen in October 2021.
This is due to a fall in the wholesale fuel costs and could result in a fall to below £1.40p this week.
Last month the supermarkets were criticised for over pricing when the Competition and Markets Authority said that prices for petrol and diesel had not fallen in line with wholesale costs and suggested competition in the fuel market was not working.
This seems to have had the desired effect with prices expected to fall between now and Christmas to reflect the wholesale price fall.
In June 2022 pump prices peaked at a record £1.92p a litre for petrol and £1.99p for diesel but when the oil price fell back from its peak fuel prices also dropped but concerns were raised about whether the supermarkets were not passing on the full benefit and in July this year the British were found to have paid an extra 6p per litre in 2022 as weak competition let them charge more.
Fuel prices rose again earlier this year for four months in a row, helping to fuel the inflation rate which in turn led to the rise in interest rates. The current fall should help to reduce the inflation rate and make one good reason to the banks to start to reduce interest rates in early 2024.
As petrol prices fall the arguments about electrification continue with many experts adding to the controversy by agreeing with many of the public and stating the supply of electric vehicles will only meet the government’s expectations when the infrastructure has improved and the prices of new electric vehicles are much closer to their internal combustion engine equivalent. At the same time the Society of Motor Manufacturers and Traders continually asks for delay and further financial help to compensate for the investments manufacturers and dealers have already made.
The business market in the major companies in Europe has been responsible for over half of the electric vehicle sales and now the general public’s enthusiasm has to be raised.
One suggestion has been to increase the period of the contract in order to bring down the monthly payments but this is only likely to influence those with home charging who are using the car to commute to work and can show a real saving over their ICE equivalent.
There will be new electric models coming to market in the second half of 2024 and into 2025 but the challenge for the manufacturers will be to prevent the build-up of stocks of ICE product and find they are forced to make price reductions, making them even more attractive against their ICE equivalent.
The fall in used car prices of both electric and ICE vehicles has helped the market and there will be, without doubt, some attractive offers in the January sales but 2024 appears like a challenging year for the motor industry. Perhaps more incentive for the consumer to upgrade.