RAC warning on fuel prices as diesel sold at 17p more per litre than petrol despite oil price fall
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Diesel is being sold for about 17p per litre more on average than petrol despite the fall in wholesale costs to similar levels, it has been revealed. RAC Fuel Watch said the average diesel prices are £1.64 per litre compared with £1.47 per litre for petrol although both are being priced at about £1.15 wholesale.
Describing the difference as “scandalous” and “absolutely shocking”, RAC, which tracks and campaigns on fuel prices, said the cuts in the wholesale price had not been passed onto customers. Simon Williams, fuel spokesperson for the group, said there was “still more than 17p difference at the pump”.
He said given the drop in wholesale prices forecourts should have already lowered diesel pump prices to about £1.52, with a further decrease to £1.47 expected in the coming weeks. Price changes in the wholesale market can take time to feed through to changes at the pumps, due to how frequently smaller sellers restock.
Simon Williams said: “The forecourt price disparity between petrol and diesel across the UK is absolutely shocking given their wholesale prices are now virtually identical.At the beginning of March wholesale diesel was only 6p more expensive than petrol yet there was a 20p a litre gap between both fuels on the forecourt.
“Now the two fuels are identical on the wholesale market, and there’s still more than 17p difference at the pump. For retailers to be taking a margin of nearly 20p a litre on average throughout March, compared to the long-term average of 7p, is devastating for every driver and business that relies on diesel.
“The price of a litre of diesel should have already come down to around 152p, and now the wholesale price is the same as petrol at 114p we really should soon be seeing forecourts displaying prices of 147p. Sadly, this seems unlikely given current retailer behaviour. Instead, the big four supermarkets, which dominate UK fuel retailing, are charging an outrageous 162p a litre on average.
“As the supermarkets buy so frequently they have had plenty of time to pass on the lower prices they are benefitting from on the wholesale market to drivers at the pumps, but they remain totally resolute in their refusal to cut their prices substantially which is nothing short of scandalous, particularly in a cost-of-living crisis.”
Williams said the sole national retailer prepared to buck this trend appears to be membership-only chain Costco, which is charging just under 150p a litre for diesel at the moment.
He said since the beginning of March, retailers have only reduced diesel by just over 3p a litre. Considering supermarket prices are usually around 4p cheaper than the UK average, their customers should have been seeing prices under 150p weeks ago, he added.
Williams said: “We are also seeing many independent retailers charging far less than their supermarket rivals which is a sign of how much fuel retailing has changed. This would have been pretty unusual several years ago but is now rapidly becoming the norm.
“If smaller retailers can afford to make ends meet with lower margins and smaller sales volumes, then what excuse can the supermarkets possibly have for keeping their diesel prices so high?
“We hope the Competition and Markets Authority, which is currently reviewing the road fuel market in the UK, is keeping a watchful eye on this pricing behaviour as we believe it’s against the interests of diesel drivers up and down the country.”
However, Andrew Opie, director for food at the British Retail Consortium, which represents supermarkets, told the BBC: "Retailers understand the cost pressures facing motorists and will do everything they can to offer the best value-for-money across petrol forecourts."
The trade group did not directly address the price discrepancy, but noted that because retail prices frequently lag behind wholesale prices, the recent drops in diesel wholesale prices were still making their way to consumers.