NEW YORK WHOLESALE

The price of oil fell below the $100 a barrel mark on Friday for the first time since last October, but a weaker pound means drivers won’t save a penny at the pumps.

A barrel of Brent crude fell to $98, down from $120 a barrel last month.

The 2p saving drivers should see at the pumps as a result of lower oil prices, however, has been 'knocked out' because the pound has fallen in value by 4% since the middle of May, the AA explained.

'Had the pound remained worth $1.61 instead of around $1.53 now, further falls in the NW Europe wholesale price of petrol (taking it below $1000 a tonne for the first time since January) would have saved drivers a further 2p a litre,' the AA said.

Meanwhile, retailers have also yet to pass on the full 10p a litre saving from previous falls in wholesale prices to drivers.

Drivers have seen a saving of just seven and a half pence per litre at the pumps, Luke Bosdet of the AA explained. So while a weaker pound means they will not benefit from the most recent drop in wholesale prices, they are still owed a two and a half pence saving from the wholesale price falls seen since mid-April.

Yesterday the average price of petrol in the UK stood at 134.92p a litre, down from the record high of 142.8p seen in April. The cost of diesel, meanwhile, has fallen from 147.93p to 140.52p.

Earlier this week, the government warned fuel companies that they were being given 'one last chance' to improve transparency in the market.

Retailers have long been accused of responding to increases in wholesale prices much more quickly than price falls – prices shoot up like a rocket and fall like a feather, said Bosdet.

Transport secretary Justine Greening has now ordered retailers to set up a code of practice that allows drivers to monitor changes in petrol and diesel prices. If they don't, the government has said it will implement legislation.

Retailers claim that the industry does not understand the complex pricing mechanism, said Bosdet. Yet this fall in the price of oil is a perfect example of why greater transparency in the market would benefit suppliers as well as drivers.

On the one hand transparency would show drivers that a quarter of the savings from the original fall in wholesale prices was yet to be reflected at the pump, while on the other retailers and suppliers accused of pocketing the benefits of falling oil prices, would be able to defend themselves as to why a weaker pound means there will be no added savings.