It feels like all we’ve been hearing about of late has been the ridiculously expensive price of petrol and diesel. Nobody enjoys paying over the odds for fuel, but in July there was some respite with UK petrol prices falling by almost 8.74p down to 182.69p and diesel down by 6.69p to 192.38p. However, the RAC has argued that major retailers should be doing more, and are still not passing on the full savings from the falling wholesale cost of fuel.
The wholesale cost of petrol hasn’t actually stopped falling for eight weeks in a row – from the beginning of June to the end of July it dropped by 20p to a price of 131.75p. Last time wholesale petrol prices were that low was in May, when prices at the pump were around 167p per litre. So why are retailers still charging 15p per litre (estimated at an average £9 per tank) more than that for petrol? Well, because they want to and they can…
BP has just announced its biggest profit in 14 years, raking in £6.9bn between April and June 2022 - three times what it made last year. So at least the oil company shareholders are happy.
Fuel spokesman for the RAC Simon Williams has also pinned the blame on the four major UK supermarkets (Tesco, ASDA, Morrisons and Sainsbury’s) and their “unwillingness to cut their prices to a more reasonable level, reflecting the consistent and significant reductions in the wholesale cost of petrol and diesel”.
He pointed out that it was independent retailers that led the recent cut in fuel prices, with the major supermarket chains eventually following suit on around the 29 July. According to Simon Williams, supermarkets should have been cutting their prices on a daily basis to mirror the steady decline in wholesale petrol and diesel costs.
The UK government introduced a 5p-per-litre fuel duty cut to ease the effect of rising costs on customers, though many speculated that fuel retailers pocketed these potential savings instead. An investigation conducted by the Competition and Markets Authority (CMA), however, found that the tax cut was indeed reflected in petrol and diesel prices in the UK.
With fuel retailers’ profit margins now up by around 20p per litre (more than triple the long-term average) it’s hard for motorists not to feel short-changed. The RAC’s advice is to no longer assume supermarkets’ fuel prices are the cheapest – it’s time to shop around.