Robbery at the pumps

Oil companies stand accused today of cheating London motorists out of £1.50 a tank after the price slumped again on world markets.

The cost of crude has now lost more than 25 per cent of its value since July. But in the same period, petrol prices have come down by only five per cent.

AA spokesman Luke Bosdet said drivers were being ripped off twice on the capital's forecourts.

"London is now the most expensive place in the country to buy petrol, so drivers are already paying at least 1p a litre more than the national average," he said.

"On top of that we calculate that with the falling oil price, petrol is about 1.5p higher than it should be anyway. If you put that together, the 2.5p difference works out that London drivers are paying between £1.25 and £1.50 more to fill up than they should be. Over the past two to three days the price of fuel has actually gone up. Drivers quite reasonably say, 'What the hell is going on?'

"The industry says it takes four to six weeks for [a fall in the crude oil price] to work through to the pump. Yet here we are six weeks on and the petrol price has gone up and the oil price is now down by 25 per cent."

The price of Brent crude peaked at $147 a barrel in July. It has been dropping since then and in trading today there was a further fall of $2.06, taking it to $104.24. Many commentators say it will fall below the $100 mark over the coming weeks.

But overall prices on London forecourts have only edged down from their peak of 120.3p a litre in July to 114.4p today.

A Shell UK spokeswoman said: "In the UK, selling petrol is an extremely competitive, low-margin business. UK pump prices are the result of a combination of many factors, not just the crude price.

"They include tax, the international price for refined products, exchange rate movements, the very competitive nature of the UK market and distribution costs."

One possible explanation for London having the most expensive petrol in the country is the relative scarcity of Asda and Morrison supermarkets, the two most aggressively priced petrol retailers in Britain, according to the AA.

The last time oil was priced at $100 a barrel - in March this year - a litre of unleaded petrol was 104p, and diesel was 109.3p.

City analysts said the slide in the oil price was due to growing concern about the weakening world economy, particularly rapidly slowing demand in America.