Motorists are paying over the odds for fuel at UK forecourts as retailers fail to pass on a significant fall in wholesale costs, the motoring group RAC has warned.
The roadside recovery company said the wholesale cost of unleaded — the price when it arrives at forecourts — is now back down to its early May price of 131.75 pence ($1.61) per litre, which saw average pump prices of about 167p per litre.
But drivers are currently paying an average of 183p per litre at pumps across the UK despite the drop in wholesale costs, the RAC said.
It comes after fuel prices hit their highest-ever levels earlier this summer as the UK’s cost-of-living crisis began to bite, with the cost of filling an average tank breaching £100 and resulting in go-slow fuel protests on motorways. Last month, retailers were accused of “rocket and feather pricing” — hiking prices swiftly but reacting much more slowly to bring them down.
Average petrol prices rose by 29 pence a litre in two months to a record high of 191.53p on July 3 and diesel climbed 22p to an all-time high of 199.09p on 25 June.
The wholesale cost of petrol has fallen by 20p since early June, according to the RAC.
Yet UK retailers continued to increase their prices in June and only dropped their pump prices by an average of 9p during July, the RAC said.
This means drivers filling up at the end-July average of 183p per litre could be paying almost £9 a tank more than they should be.
Equally, the RAC said drivers should now be paying about 182p per litre for diesel — nearly £6 a tank lower than the end-July average of 192p per litre.
While these are the third and fourth biggest monthly reductions respectively in the last 20 years, the RAC said they still do not fairly reflect the fall in the wholesale price of fuel, and major retailers should be cutting pump prices much more.
Independent retailers have been quicker to respond by dropping prices, the RAC said.
But the “big four” supermarkets — Tesco, Asda, Morrisons and Sainsbury’s, along with several other suppliers — have been criticised for failing to reduce their prices in line with falling wholesale costs.
The RAC said that while several reduced their prices last week, the cuts are not enough to be in line with the wholesale cost.
RAC fuel spokesman Simon Williams said: “July has been an unnecessarily tough month for drivers due to the big four supermarkets’ unwillingness to cut their prices to a more a reasonable level, reflecting the consistent and significant reductions in the wholesale cost of petrol and diesel.
“As it was, we saw independent retailers leading the charge with fairer pump prices appearing all around the country which eventually forced the supermarkets to finally implement a more substantial cut late last Friday afternoon.
“What ought to have happened is that the biggest retailers cut their prices more significantly on a daily basis, given the wholesale price of petrol has fallen steadily over the last eight weeks.”
Mr Williams advised drivers that they should no longer assume supermarkets are the cheapest places to get fuel.
He said motorists should “shop around as it’s highly likely you’ll find an independent retailer which is doing the right thing and fairly reflecting their lower wholesale costs by charging a lower price”.
He added: “This is really encouraging because the independents buy new stock less frequently than the supermarkets as they don’t sell as much, and consequently aren’t as well positioned as their rivals to be able to snap up fuel at lower prices when there are sudden market drops.”
A representative for Sainsbury’s said: “We are committed to offering motorists great value and over the weekend we lowered the price of petrol and diesel across our forecourts. We price locally and competitively.”
Tesco, Asda and Morrisons have been contacted for comment.
Source: The National
Image source: Pexels
