Motoring group RAC has accused the Big Four supermarkets of failing to pass on drops in wholesale costs to drivers, despite petrol prices falling to their lowest levels since mid-May this week.
Prices for unleaded have dropped to an average of 164.78p per litre at UK forecourts, while diesel prices have slumped to 181.28p per litre.
This follows prices closing in on £2 per litre amid fears of supply shortages during a record summer rally.
RAC has described the developments as “clearly good news” for motorists, but argued that prices should have “fallen much further than they have” to match dips in wholesale prices.
In recent weeks, oil prices have dipped reflecting easing market concerns with fears of a recession driving down global demand.
Brent Crude has dropped to $90 per barrel, following six months of near-continuous trading above the $100 milestone after Russia’s invasion of Ukraine in February.
It believed that the traditional Big Four supermarkets – Asda, Tesco, Sainsbury’s and Morrisons – had failed to pass on these savings to customers.
RAC fuel spokesman Simon Williams said: “The main reason this hasn’t happened is that the big four supermarkets, which dominate UK fuel sales, have refused to pass on savings they are benefitting from buying cheaper wholesale petrol and diesel. This means average margins are now 19p a litre – 12p more than the long-term average. Petrol should really be on sale for 153p a litre and diesel 175p.”
He contrasted this with independent retailers which were traditionally more expensive but were now selling at lower prices.
Williams said:“Proof of this is the fact that average price of a litre of unleaded at a supermarket is only a penny lower than the UK average when it used to be around 4p lower.”
RAC suggests CMA could step in
The RAC urged the market watchdog to assess the situation to ensure retailers are not taking advantage of motorists.
Williams said: “We hope the Competition and Markets Authority (CMA) is watching what’s happening closely.”
Earlier this year, the CMA investigated petrol retailers amid concerns they had failed to pass on a five pence fuel duty cut.
The CMA’s urgent review, which was ordered by Business Secretary Kwasi Kwarteng in June, found an increase “refining spread” had added 24p a litre to petrol and diesel over the last year, which led to pump prices rising despite the wholesale price falling.
However, it argued at the time that the main drivers of increased road fuel prices had been the cost of crude oil, and a gap between its price and wholesale.
Asda, Sainsbury’s, Tesco and Morrisons have been approached for comment.