Why do interest rates decline on savings accounts but mortgage interest rates don’t? Why does oil price go down but petrol/diesel prices don’t?

[Thatone5]

Why do interest rates decline on savings accounts due to base rate reduction but mortgage interest rates don’t? Why does oil price go down but petrol/diesel prices to the consumer don’t?

It seems like In times of financial difficulties, stuff like this makes it harder for the average joe.

Is it to recoup losses due to furlough costs, etc?

Petrol and diesel have both gone down here!

Agree with pp, fuel prices have dropped hugely!

Petrol has gone done massively where I live (Australia), and my mortgage has gone down too.

My mortgage has gone down.

Mortgage rates do go down. But not if you're on a fixed rate. That's the deal you sign up for.

The first 60p of price for a litre of petrol is tax, so that will stay unchanged. Then there will be an amount added by the fuel company to cover cost of getting fuel to garage and running stations/pumps. Say 30p. Then the rest will be cost of fuel itself. So if fuel drops at your local garage from 1.40 a litre to 1.00 a litre, the actual elemrnt related to the fuel price itself hasDropped from 50p to 10p, which is an 80% drop in price.
And there is a time lag between price quoted on press and price at pump because high volume users buy ‘forward’ to ensure they manage their supply chain properly.

I'm in Australia - fuel prices are half what they were 3 months ago. And mortgage rates have dipped to 2%, cheapest in years.

We’re on a tracker mortgage and got a letter to say it’s going down £50 per month.

Petrol here is down to 104/litre, even diesel is now cheaper than petrol used to be.

Echoing PP that fuel costs have dropped massively here.

Tracker mortgages follow the interest rate drop. We are now only paying about 0.7%.

I’m filling up with petrol today, keen to see the price.

Yes, our mortgage rate for the tracker mortgage we are applied for (just as vase rate was reduced) went down from 1.59% to 1.09%.

There are also costs like managing accounts, paying for staff and offices etc, plus distribution for fuel and the costs of running the filling station.

It's the risk you take when you take out a fixed rate mortgage, that extra security costs and people worry too much about the high interest rates we saw in the 1970s and late 1980s. There hasn't been a risk of interest rates rising to anywhere near those levels for over 10 years and not in the short to medium term either. We've never fixed and it's been cheaper for all but about 3 months of the last 25 years. Currently paying less than 0.5% interest on our mortgage.

Petrol is cheaper than its been for years and well over half the cost is tax, so you need to look at the government, who won't be able to reduce taxes for a very long time due to all the covid-19 related borrowing. Plus demand is so much lower at the moment so petrol stations will be struggling on much reduced sales.

Why does oil price go down but petrol/diesel prices to the consumer don’t?

TL;DR because there is a built in delay created by the fact that oil tends to be traded in futures rather than spot prices. So the price at the pumps now is more related to the barrel price a few months ago.

Probably not a great thing if it gets too cheap - then it simply won't be worth anyone selling.

Errrm, OP, the mortgage rates and fuel prices have both come down?

They do

Depends on your mortgage. We're on a tracker and ours has gone down. If you're on fixed rate it won't.

I'm on a variable rate, tracker mortgage and my payments have come down.

I have just filled up at 98p per litre, a long time since I saw petrol below £1a litre!

Wow. It was all around 102.7 here yesterday and I'm getting around to needing to fill up and am in two minds whether to go for the full tank (I normally just fill the car up when it's empty and due to commuting and visiting work clients I used to buy fuel at least twice a week) or just put about £20 in because I'm using next to no fuel ATM, which is a huge change for me.

The tank I've got was bought five weeks ago tomorrow and I used a good portion of it on the day I bought it, as that was the last day I visited a work client.