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Fuel prices too high says AA boss

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The fall in the price of oil is not being passed on to motorists, who are paying 2p a litre more for fuel than they should be, says AA president Edmund King.

He told ITV news: "The pound is weaker against the dollar, but that doesn't account for it all, it only counts for about 10%."

He added: "Oil companies have been quite slow in passing it on to the consumer. By our calculations, we estimate the price at the pump should be two pence less than it is at the moment."

Because the pound is at a two-and-a-half-year low against the dollar, the wholesale cost of petrol and diesel - priced in dollars - has increased.

Average petrol prices peaked at 119.7p per litre and 133.25p for diesel in mid-July, but at the end of last weekend, these stood at 112.33p and 123.75p respectively. The extra fuel costs have added to the increased financial burden facing motorists, which includes car insurance and tax.

Any further falls in prices may also be curtailed by the Organisation of Petroleum Exporting Countries cartel, which has signalled it may take action to defend the 100-dollars-a-barrel level when it meets on September 9.

© The Press Association 2008