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Supermarket margins on petrol and diesel more than DOUBLED since Russia invaded Ukraine reveals RAC

New analysis from the RAC reveals that supermarket margins on petrol and diesel have more than doubled since Russia invaded Ukraine.

Before the commencement of the war, the largest supermarket chains in the UK held a margin of just under 5p per litre (4.7p) on fuel, with petrol accounting for 3.7p and diesel for 5.7p. Since the start of the conflict, these margins have increased to 10p per litre (9.3p for petrol and 10.8p for diesel).

According to RAC Fuel Watch data for 2022, the margin on supermarket petrol at one point soared to almost 11p per litre (10.8p), reaching as high as 20p in the weeks following a record pump price of 191.5p on 3 July, driven by escalating oil costs.

The data further reveals that supermarket margins on diesel have averaged at 15p per litre so far in 2023. This significant margin has been due to the wholesale price of diesel falling substantially, but the savings not being fully passed on to drivers at the forecourts. In May, the wholesale price of diesel dipped below the wholesale cost for three months, resulting in supermarket margins soaring to a high of 23p per litre.

Comparatively, in 2016, the supermarket margin on a litre of fuel was just 2.3p. It steadily increased to nearly 6p (5.7p) by 2019 and remained at that level during the pandemic years. However, in 2022, the RAC Fuel Watch data indicates a 54% surge to a margin exceeding 9p per litre, which has further risen to almost 11p this year.

The analysis demonstrates a significant disparity between wholesale fuel price reductions and the prices offered to consumers. As fuel prices remain a major expense for drivers, the increased margins on petrol and diesel have raised concerns and calls for greater transparency in fuel pricing.

RAC fuel spokesman Simon Williams said: “With news that lower fuel prices were one of the main reasons for inflation falling to 7.9% last month, our data clearly shows that this could have been lower still had the supermarkets reduced their pump prices in line with cheaper wholesale costs.

“Our analysis of wholesale and retail prices reveals the big four supermarkets have benefited considerably on the back of the dramatic wholesale market fluctuations caused by the start of the war in Ukraine.

“They appear to have capitalised on petrol in the early months of the war by upping their margin by 5p a litre in 2022, while they have increased their margin on diesel by nearly 8p this year to 15p by putting off reducing their prices when the wholesale price tumbled. Frighteningly, this is twice the average supermarket margin on diesel from 2019 to 2022.

“While we accept the cost of running forecourts might have increased, these bloated margins must make difficult reading for the millions of drivers who are already battling the rising cost of living. In short, this means everyone is paying more than they should be to a lesser or greater extent depending on where they live.

“We hope artificially high pump prices will become a thing of the past due to the actions promised by the Government resulting from the Competition and Markets Authority (CMA) report earlier this month that showed supermarkets had overcharged drivers to the tune of £900m last year. Their recommendation that a price monitoring body is set up and that retailers are mandated to provide live prices for fuel finder apps is very welcome and long overdue.

“While there was another positive step this week when Energy Secretary Grant Shapps met the country’s biggest retailers to tell them to provide real-time prices immediately, we don’t believe drivers will really start to see fairer prices until the official wholesale price monitoring body is set up and given the power to penalise companies that don’t fully reflect significant downward wholesale market movements on their forecourts.

“We will be emphasising how important this is for fuel price transparency to the CMA as part of our ongoing discussions with them.”


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