The RAC says there is “no good reason” why prices have not been reduced as wholesale costs have fallen since the end of April. A motoring group called on regulators to act.
According to Daniel Binns, business reporter
Mon Jun 17 2024 07:42 UK
Fuel retailers have been accused of using the “distraction” of the general election to keep petrol and diesel prices “persistently high”.
The RAC said refueling costs at the pumps were “much higher” than would normally be expected as wholesale costs fell since the end of April.
The average price of a liter of petrol in the UK is currently 146.3p, which the carmaker says is “5p more expensive than it should be”.
It said the average price for the same product in Northern Ireland was 141.1p.
Meanwhile, a liter of diesel in the UK costs an average of 151.5p – the most expensive in Europe – while in Northern Ireland the price is 141.9p, the RAC claimed.
Its head of policy, Simon Williams, said: “Once again, margins remain consistently high and drivers are paying the price.
“Our data clearly shows that pump prices have not fallen in line with wholesale price cuts, so drivers across the UK – with the exception of those in Northern Ireland where fairer prices are charged – are once again losing a few pounds every time they fill up.
“We believe there is no good reason for UK retailers not to reduce their prices at the pump much further.
“We can only think they’re hoping no one will notice because of the distraction general election.”
Read more from the business:
The postal activist received a knighthood
Barclays to ‘step back’ from festival sponsorship
Dozens of food products have been recalled due to the risk of E.coli
The RAC said retailers’ margins – the difference between what they paid for fuel and the price at the pump – were 14p per liter for petrol and 16p per liter for diesel.
The long-term average for both fuels is 8p per litre.
Mr Williams said the firm had hoped Competition and Markets Authority (CMA) is “aware of what is happening and will use this to bring retailers into compliance as soon as possible”.
An investigation by the regulator into supermarket petrol station prices last year found that increased profit margins led to drivers paying 6p per liter surcharge for fuel in 2022.
In March, the CMA reported margins remained “regarding”.
Prices are usually cheaper in Northern Ireland than in the rest of the UK, partly due to competition from forecourts in the Republic of Ireland.
Independent fuel retailers said higher business rates, energy bills and wages contributed to higher costs.
Gordon Balmer, chief executive of the Petrol Retailers Association (PRA), said: “Current analyzes comparing today’s fuel margins with historical figures overlook several critical factors.
“We have to take into account the significant increase in operating costs, reduced fuel volumes after the pandemic and the significant investment required to transition to a low-carbon transport system.
“These factors mean that fuel retailers need to earn more from fuel sales to stay in business and invest in the future.”
He added: “The PRA has maintained transparency in its dealings with the government on fuel prices and will meet CMA officials to discuss this further.”
The CMA declined to comment, but the regulator is expected to publish its latest fuel price monitoring report next month.