Should petrol prices now be less than £1 a litre?

This story offers another interesting dimension to the economics of the coronavirus, with motoring organisations arguing that petrol retailers are ripping off consumers, in not passing on the falling price of oil.

The AA argues that the price at the pump should have fallen to around £1, in comparison to the £1.10 currently charged, implying that the profit margins of retailers have increased at the expense of the consumer. And there may be some truth in this, although the margin on a litre of fuel is already fairly small, with the bulk of the price of petrol being tax.

There's also a Keynesian angle to this: can you recall what Keynes said about wages and prices? If you can, you won't be as surprised by this story as you might otherwise have been.