The UK’s biggest fuel retailers are charging an extra 5p for every liter of petrol sold to motorists, according to the latest report.
The RAC said the average price of unleaded petrol was 155.3p per liter but was expected to fall to 150p based on wholesale prices to retailers in recent weeks.
Failure to pass on these savings is tantamount to retailers pocketing the government’s savings Shortly after Russia’s invasion of Ukraine last year, a 5p tariff cut was introduced to help struggling families cope with the cost of living crisis.
Instead, the RAC says the fuel duty cut only serves to “help retailers who have chosen to increase their margins”, which should infuriate drivers and the Treasury.
‘Both drivers and the Treasury should rightly be angry’: The RAC says Britain’s biggest petrol retailers are pocketing the 5p per liter fuel duty cut introduced by the Government in March 2022 to help struggling families during the to help the cost of living crisis
A barrel of oil trades for around $90, meaning the delivered wholesale price of petrol averaged just over 113p last week.
With the average price of unleaded lead in the UK being 155.33p, the average trading margin before VAT was applied was more than 16p per liter.
“This is in stark contrast to the long-term average of 7p per liter and is even far higher than the 10p margin that smaller, independent retailers now believe is fair due to inflation,” the RAC said.
Even diesel, which currently costs an average of 162p nationally, is estimated to be overpriced by around 4p per liter.
Last week a liter of wholesale diesel cost an average of 123p, meaning the average retail margin is around 12p, compared to the long-term value of 8p recorded by the RAC since 2012.
Failure to reduce pump prices to fairer levels, despite a clear opportunity to do so, will keep inflation artificially high – which the RAC says is clearly in no one’s interest
The news of significantly above-average margins uncovered in the RAC’s analysis is said to be “very worrying” as the Competition and Markets Authority (CMA) completed its investigation in the summer and found that the big four supermarkets were underperforming drivers at 18 Pence had charged inflated prices – per liter in 2022, which would cost them around £900 million.
The RAC is concerned that recent history already appears to be repeating itself.
The regulator’s report recommended that retailers should be required to provide real-time pump prices per location and that a price monitoring body should be created – both of which the government has pledged to legislate.
In fact, many larger retailers have started doing this after being urged by the former Energy Secretary to publish prices before it becomes a legal requirement.
Unfortunately, there is no news yet on when a pump price watchdog might be set up.
RAC fuel spokesman Simon Williams said: “Unfortunately, our analysis shows that despite the CMA’s investigation confirming that drivers were being defrauded at the pumps – something we have been saying for years – and the Government responding on the basis of those findings, nothing has changed .”
“Motorists still face big losses when wholesale prices fall.”
The RAC has calculated average retail margins on both petrol and diesel over the last eight years and shows they are making far higher profits today than in 2016. There was an average margin increase of almost 5p per liter before and after the Ukraine war, is it[called
However, not all drivers across the UK are being ripped off by retailers.
In Northern Ireland, where supermarkets do not dominate the fuel trade, motorists are said to be getting a fairer deal: a liter of unleaded petrol costs 150p and diesel costs 157p – 5p less than the UK average.
Mr Williams said both drivers and the Treasury should rightly be “furious” that the 5p per liter tax cut, which has been in effect since the end of March 2022, is not being passed on to petrol stations.
“Investigation of RAC Fuel Watch data leaves no doubt that margins have increased across the board and while retailers argue that their costs have risen due to inflation, the irony remains that there is clearly a link between the gas station prices and consumer price inflation.”
“Failure to reduce pump prices to fairer levels when there is a clear opportunity to do so will keep inflation artificially high – which is clearly in no one’s interest.”
“Our data shows that the big four supermarkets’ margin on petrol was around 14p this month, compared to an average of 7p so far this year, and shockingly this is up from just 3.4p for the whole of 2019. “
He added: “We urgently need the Government to set up the price watchdog body recommended by the CMA and for it to be given the power to take action against large retailers who fail to reflect the downward movements in the wholesale market such as we have seen.” last six weeks.
“We have informed the Treasury that the 5p tariff cut is not helping motorists as intended and are now reaching out to the big four supermarkets, which lead the retail market as they sell around half of the fuel they buy from drivers , to explain their steadfast refusal to reduce prices to a fairer level.
“Unfortunately, we know this is highly unlikely and instead we will get, at best, another banal statement from the British Retail Consortium, while independent retailers will feel the need to defend themselves, even though we recognize this is not a problem.” their production.’
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