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WASHINGTON and LONDON -- While crude oil prices continue to drop, motorists in the United States and Europe have yet to realize significant savings as retailers keep a watchful eye on market returns.
"There’s a whole lot more pressure on retailers to hold back price increases and there’s less pressure when prices are coming down. So they’re able to expand margins," Jeff Lenard, spokesman for NACS, told Reuters.
In July, crude oil was trading at a record high of $147 a barrel, while this week prices dropped by $33 a barrel. Reuters reported U.S. gasoline prices over the same period have declined only 37 cents from the record of $4.11 a gallon to $3.74 this week.
There is generally a two week lag time before cheaper crude prices are reflected at the pump, according to the report. It can take, however, up to eight weeks before the full savings is passed onto consumers. As a result, industry analysts said retailers are looking to recoup on monies lost.
However, in the United Kingdom, gasoline prices have declined faster. Reuters reported pump prices are now down by 43 cents per U.S. gallon from a peak of $8.56 last month.
"The first half of the year was just abysmal," Lenard told Reuters. "The reality is if the retailer didn’t start expanding margins right now, you’re not going to see that station open much longer."
Doug MacIntyre, senior analyst at the U.S. Energy Information Administration, noted in the near future, motorists will see decreases at the pump. "We still have some of that to get passed through. We still have certainly more than a dime to go, probably more than that," he told Reuters.