Northern Ireland petrol and diesel prices to level off or even start rising warns AA

The sobering news came after it was revealed last week that the average price of petrol in the UK fell below 150p per litre for the first time in more than 10 months.

The reduction of the UK average of nearly 42p from the record high of 191.5p in July last year, as “a huge relief for drivers”, according to the AA.

The last time the average UK price of petrol was below 150p per litre was on February 24, last year, the day Russia launched its full-scale invasion of Ukraine.

In the NI the price drop has been even more noticeable.

According to Consumer Council records the average NI petrol price on 12 January was 143.5p - down from a peak of 189.9p in June last year. Similarly, the average NI diesel price was down to 164p from a peak of 197.5p.

However this week, Luke Bosdet from the AA warned that the dropping forecourt prices may soon level out - or even rise again.

"UK pump prices continue to fall although higher wholesale costs feeding through to forecourts in coming weeks are expected to be reflected in pump prices levelling off or even rising," he told the News Letter. "This follows oil’s return to $85 a barrel. Meanwhile, Northern Ireland’s road fuel remained substantially cheaper than other parts of the UK last week."

On he noted that on 9 January diesel and petrol in London were 175.5p and 152.21p while in NI figures for the same date were significantly lower at 164.18p and 144p.

Ulster University economist Dr Esmond Birnie said it is well recognised that retail fuel prices rise much faster than they fall.

"As economists would put it, there is a ratchet effect - prices are much more likely to go up than down - or, as the Competition and Markets Authority (CMA) put it much more poetically in their report on all of this last year, petrol and diesel prices have some tendency to go up like a rocket but fall quite slowly like a feather.

"It is also also worth noting, for once, NI may not be worst off in this regard. There is some evidence that NI had a greater, recent fall in pump prices than many parts of England. One plausible explanation for this could be the Consumer Council’s Price Checker which has helped keep motorists informed about where to get the best buy, presumably such market intelligence is not available in England."

Speaking about the possible reasons for the “failure” of pump prices to track the underlying wholesale price of oil, he said the CMA pointed to lack of competition.

“It found that petrol stations with nearby competitors were more likely to have seen marked declines in prices. CMA also detected some evidence of a widening of profit margins a the level of oil refineries, albeit not by a great extent,” he added.