One of the UK’s largest motorist organisations has accused forecourts of profiteering from fuel prices by failing to pass on a fall in wholesale costs.
The RAC said costs at the pump were still much higher than wholesale costs which have fallen in the last few months.
Data published today by the RAC showed that between mid-October and mid-December, wholesale petrol costs slumped by 23p per litre, while the average price at the pump was cut by only 18p to 148.6p.
At the same time the price of diesel at the pump came down only 20p per litre to 170.5p, despite wholesale costs plummeting by over 31.8p.
According to analysis by the RAC, the average retailer’s margin on petrol was 13.5p per litre, 4.8 per cent higher than in 2021, while the profit from diesel rose 1.5 per cent.
“Our data shows that when wholesale prices increase, pump prices tend to rise very soon afterwards,” said RAC’s fuel spokesperson Simon Williams.
“Yet, when wholesale prices fall it takes far longer for forecourt prices to come down.”
Williams pointed the finger specifically against supermarkets, as the Big Four – Tesco, Sainsbury’s, Asda and Morrisons – dominate the UK fuel retail market.
“Not only were they slow to pass on wholesale price reductions, cutting prices by less than 2p a week over the course of three months, they also didn’t go far enough, especially when it came to reducing the price of diesel on their forecourts,” he added.
Williams has urged the government to ensure retailers “quickly pass on savings to drivers every time there is significant downward movement in the wholesale price of fuel.”
Andrew Opie, director of food & sustainability at the British Retail Consortium, told City A.M. retailers understood the financial pressures faced by motorists and “will do everything they can to continue to offer the best value-for-money across their forecourts.”
His words were echoed by a BEIS spokesperson, who said the government “will not hesitate to act to ensure competition in the retail fuel industry is healthy and that consumers get a fair deal on their fuel, if necessary.”
The news comes days after motoring groups warned about higher fuel prices if a rumoured merger between the Issa brothers’ forecourt business and Asda, City A.M. reported.
The billionaires – who bought Asda in 2020 for £6.8bn – are reportedly plotting to merge the supermarket chain with their forecourt business EG Group.
“Asda pump prices have been the lowest across the nation for decades, but I and most motorists are not convinced any merged deal will settle at the supermarket’s traditionally much lower fill-up prices,” Fairfuel’s founder Howard Cox said.
Morrisons declined to comment while Sainsbury’s, Tesco and Asda were approached for comment.