RAC slammed petrol retailers for raising prices despite plummeting wholesale costs, with both major oil benchmarks tumbling by as much as 20 per cent during the past month.
It has accused petrol retailers of “taking drivers for a ride” amid soaring prices at the pumps.
Customer costs for fuel at UK forecourts remain at near-record totals, even if petrol prices dropped last week by 0.5p to 147.28p a litre, while diesel also fell to 150.64p.
RAC argues the high cost of fuel is “hurting drivers at the worst possible time” with Christmas just around the corner.
The motoring group believes that current forecourt prices, which are three pence up on last month, are “completely unjustified”.
It estimates drivers are losing out to the tune of £5.5m a day based on current prices.
Alongside concerns for customers, RAC has also argued “competition in fuel retailing isn’t working” due to the lack of variation in pricing between the big supermarket retailers with barely four pence in difference between major outlets.
It has called for the government to step in to reduce pressure on consumers by asking retailers why they are charging more despite falling oil prices.
Fuel spokesperson Simon Williams said: “We urge the Government to intervene now. It’s a sad fact that the Chancellor’s fuel duty freeze last month, while welcome, simply wasn’t anywhere near enough to ease the burden now being placed on millions of households who have no choice but to use their vehicles.”
Commenting on the uniform prices from supermarket petrol retailers, the AA has highlighted the lack of a traditional price war between supermarkets as the festive season approaches.
Luke Bosdet, the group’s fuel spokeperson, said: “Previously, the market would wait until Asda or Morrisons announced a price cut before starting to move. Without that initial kick, pump prices have stagnated, and that is a potentially worrying development if it sets the pattern for the future.”
Howard Cox, FairFuelUK Founder argued the fuel supply chain has “a moral duty” to pass on lower wholesale costs to motorists.
He said: “”They must end their shameless unchecked greed and perennial profiteering of the world’s highest taxed drivers. Pump prices should be 4p to 6p lower now. For decades the fuel supply chain, notably a few wholesalers have ripped off drivers at will.”
Markets await effects of Omicron variant on demand
Fuel costs have soared in recent months amid rallying oil prices and increased consumption demand as pandemic restrictions ease.
However, the discovery of the Omicron variant, and its potential effects on vaccine efficacy has led to increased fears of more pandemic restrictions this winter – including new social distancing measures and air travel bans.
This has already caused oil prices to fall from three-year-highs of $86 per barrel in late October to under $70 a barrel on both the Brent Crude and WTI Crude benchmarks.
However, this fall in oil prices has not been reflected in petrol prices at the pumps.
Today is not the first time RAC has taken petrol retailers to task, having previously warned them not to “contribute further” to the crisis when oil markets were rallying.
The Petrol Retailers Association (PRA), which primarily represents family businesses and independent retailers – which make up two-thirds of all petrol forecourts – told City A.M that the industry was suffering from rising costs across the business.
Gordon Balmer, executive director of the PRA,, said: “What also needs to be taken into account is that fuel retailers have been hit by the ‘double whammy’ of reduced sales and rising costs. Electricity prices, business rates, labour costs have all risen and these need to be paid for if your local petrol station is to remain in business. Our members continually monitor prices to ensure that they remain competitive with their industry counterparts and continue to provide good value for money.”
He also pointed a clear lag in prices relative to oil benchmarks, with most independent retailers buying from fuel suppliers at a price which is based on the average price of fuel from the previous week.
He concluded: “Therefore, any reductions in wholesale prices will take some days to filter through to the pump price.”
Meanwhile, the British Retail Consortium told the newspaper it remains supportive of supermarkets, explaining they were often burdened with painful additional costs they had to factor in to pricing.
A spokesperson said: “Supermarkets are keen to provide their customers with the best value for petrol through their forecourts, offering the cheapest petrol in the country. Supermarkets work hard to pass on changes in wholesale prices to relieve pressure on consumers, though prices at the pump will be influenced by various forces, including tax, oil prices and operational costs.”