The price of petrol is increasing, says the AA, after more than three months of falling cost at the pumps, amid claims that a drop in the wholesale price of fuel has not been passed on to motorists.

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The motoring organisation has attacked the fuel industry for failing to pass on fully a 2p fall in diesel wholesale costs in November and December that, with VAT, were worth 2.5p at the pump.

The AA's claims come ahead of the publication at the end of the month of the findings of an Office for Fair Trading (OFT) review into whether reductions in the price of crude oil are being passed on to motorists.

Edmund King, the AA's president, said: "Another new year, another new round of pump price rises after the industry failed to pass on fully wholesale price savings.

Investigation

"The Office of Fair Trading decides soon whether to launch an investigation into fuel prices, hopefully tackling the fuel industry's treatment of drivers, consumers and businesses.

"The insight we are now getting on wholesale price movements rams home the need for this information to be out in the public domain immediately.

"Wholesale petrol prices turned upward in the first week of January, average pump prices six days later. If falls in wholesale were reflected as quickly, no-one would mind - but they're not."

In its latest price report the AA said a rise of 0.75p since the new year left average prices at 132.71p a litre.

Diesel is marginally cheaper than a month ago, falling by a third of a penny in the third week of December and remaining around 140p per litre throughout Christmas and early January.

But the average of 140.32p a litre, compared to 140.38p in mid December means a litre of diesel has been on average 8p a litre more expensive than petrol, compared with a 5p difference in the summer, something the AA blames on the drop in wholesale costs not being passed on.

Weakening pound

It claimed that in December into this month, the fuel industry failed to pass on fully a 2p fall in diesel wholesale.

Between late November and early December, it said, the cost of diesel to retailers fell from around 53p a litre to below 51p, but the average pump price only fell from 141.5p to 140p a litre.

Since the start of the new year, the pound has weakened against the dollar in international trading, putting pressure on prices to move upwards.

Yorkshire and Humberside remains the cheapest area in the UK for petrol and diesel at 132.1p and 139.7p a litre respectively, with Northern Ireland the dearest at 133.6p and 141.0p per litre.

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