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Does the price of petrol fully reflect the price of oil?

Over the last few months it has become apparent that the average price of a litre of petrol in the UK has stagnated somewhat despite the fact that the wholesale cost of petrol has fallen by around two pence a litre. This comes at a time when UK motorists are being hit from all angles with increased road tax, insurance premiums and now a seemingly ever upward spiral in the price of petrol. The UK government continues to increase its tax take on petrol and many experts believe we may be on the verge of a further increase in the basic price of petrol!

There are no real regulations regarding the UK petrol market because at the end of the day it is down to competition between refineries and petrol stations. We often see short-term price reductions which can attract the attention of the financial and the general press and bring in much-needed income for supermarkets and garages around the country. However, it can become very difficult to track the price of petrol against the price of oil because many people believe increases in the price of oil are passed on very quickly while reductions often take some time to filter through the system.

Unfortunately, with the UK government taking the lion's share of the cost of a litre of petrol in tax it is unlikely the authorities will clamp down on garage operators and introduce price regulations.

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