Forecourts operated by supermarket chains including Asda, Tesco, Morrisons and Sainsbury’s are contributing significantly to this price increase.
A daily UK price comparison shows retailers are slowly passing the savings on to drivers. New research by motoring group the RAC shows that British drivers are now spending an average of 20p more per liter on diesel than their counterparts in the European Union.
The average price of a liter of diesel in the UK is currently 152p, with the UK holding the top spot for diesel prices in Europe for seven weeks in a row.
However, drivers in Northern Ireland are relatively more protected from price gouging, with diesel prices around 10p per liter lower than in the rest of the country, despite coming from the same source.
With the price increase, the cost of a full tank of diesel is now £83.60 (€98.91). For a standard family car of around 55 litres, a full tank is now around £11 more than in the rest of Europe.
Forecourts operated by supermarkets are thought to be the main culprit behind this price spike, with chains such as Asda, Tesco, Morrisons and Sainsbury’s charging the most. These chains currently operate around 20% of forecourts in the UK.
However, they have a significantly weaker possession in Northern Ireland, where they make up only 6% of the yard. Diesel prices in Northern Ireland appear to be catching a breather.
RAC spokesman Simon Williams told The Telegraph: “Once again, profit margins remain consistently high and drivers are paying for it.
“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 Northern Ireland where fairer prices are charged – are once again losing a few pounds each time. will be filled.
“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 it won’t be noticed due to the distraction of the general election.”
Why are diesel prices rising so much higher in the UK than in Europe?
One of the key reasons why Britain is seeing much higher diesel prices than Europe is that retailers are not adequately passing on falling costs to consumers. Retailers currently see a profit margin of around 16p per liter of diesel, according to the RAC. In contrast, petrol has a slightly lower margin at 14p.
However, this is still much higher than the 3p margin recorded pre-pandemic by these supermarket giants, as well as the historical margin of 8p. This shows that supermarkets are still profiting from higher fuel prices, while consumers have to swallow the cost.
Retailers, in turn, justify these price increases by blaming increases in business costs and interest rates and wages that have eroded their profit margins.
Gordon Balmer, chief executive of the Petrol Retailers Association (PRA), said according to Sky News: “We have to consider the significant increase in running costs, reduced fuel volumes following the pandemic and the significant investment required to transition to low fuel consumption. 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.”
It has also led to the UK government thinking about a new ‘Pumpwatch’ scheme which will allow consumers to compare diesel prices and increase transparency in supermarket forecourts. The price watchdog is expected to monitor the system to ensure drivers are not charged more than they already are.