Supermarkets and petrol stations fail to cut fuel prices despite fall in wholesale costs, says RAC

Published by Stephen Little on 05 November 2018.
Last updated on 05 November 2018

Fuel retailers are failing to pass on price cuts to motorists despite falling wholesale costs, the RAC says.

There was a 3.5p fall in the wholesale price of petrol last month, yet unleaded started and finished the month at 130.6p a litre, according to RAC Fuel Watch data.

The RAC says this means the average cost of filling a 55-litre family car with petrol remained at £71.84 when it should have been £1.92 less “had retailers done the right thing and reflected the lower wholesale price”.

Supermarket rip off

The big four supermarket fuel retailers – which play a vital role in setting the market for fuel prices across the UK – did little to lower the price for drivers.

It was only at the end the month that Asda reduced unleaded by an average of 2.4p.

The average price of petrol at Asda, Tesco, Sainsbury’s and Morrisons actually increased by 0.6p a litre in October to 127.48p despite the drop in the wholesale cost.

Diesel saw its fourth consecutive monthly price increase, going up from by 2.38p to 136.88p, making the cost of a 55-litre tank £75.28.

The RAC is calling on retailers to lower their petrol prices in line with the reduced wholesale cost of unleaded.

Simon Williams, RAC fuel spokesperson, says: “Every motorist driving a petrol car should feel aggrieved that the price of a litre stayed the same in October when it should have fallen by more than 3p. The biggest retailers who are responsible for selling the most fuel have taken drivers for a ride.

“In doing so they have inadvertently but categorically proved that ‘rocket and feather’ pricing does exist. Had wholesale costs increased at the same rate the supermarkets would have passed these on at the pump straightaway just as they did in April and May this year."

He adds: “Unfortunately, other retailers that don’t buy wholesale fuel as frequently are just as guilty as they have now had plenty of time to cut their prices. They were, more than likely, waiting for the supermarkets to lead the way, but this surely isn’t a valid excuse.”

Fuel theft

A leading police chief wants petrol stations to change the way they charge for fuel following an increase in fuel theft.

Last year, the number of people driving off without paying for petrol – known as bilking – was 25,000.

Simon Cole, the National Police Chiefs Council’s lead on local policing, has accused petrol companies of putting profit before crime reduction, according to a report. 

He told the Daily Telegraph: "The petroleum industry could design out bilking in 30 seconds by making people pay up front, which is what they do in other countries.

"They don't, because the walk in their shops is part of their business offer."

Budget

There was welcome relief for motorists in the Budget as Chancellor Philip Hammond confirmed fuel duty would be frozen for a ninth consecutive year.

Drivers currently pay 57.95p fuel duty on a litre of petrol and diesel.

There were fears that fuel duty could rise after the chancellor hinted that a hike was necessary to help support the NHS.

The freeze since 2009 will save the average car driver over £1,000 and the average van driver £2,500 a year, the government predicts. 

 

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58p duty! So. Let's say

58p duty! So. Let's say (current price) fuel is £1.32 (131.9p, same thing). So. 22p of that is VAT, so we pay VAT on duty. Or tax on tax, simply. And thus government's share is 80p just at the pump (80/132 = 60.6 percent....). Plus road tax, IPT (insurance tax), recurring theme?

The diesel rip-off just gets

The diesel rip-off just gets worse and worse - is it really justified for there to be a 10p/L difference between petrol and diesel (as there is at my local ASDA)? Years ago I tracked wholesale against pump prices and proved that retailers (especially supermarkets) subsidise petrol by keeping the price of diesel high, but the Office of Fair Trading would not get involved (saying that they could not influence markets) even when I supplied copious data to prove the assertion. It seems to be a device for the supermarkets to be able to trumpet how good their petrol prices are whilst protecting a healthy profit margin overall. It is tantamount to abuse of diesel motorists and especially the fact that the economy moves on diesel.