UK drivers OVERCHARGED despite drop in petrol prices, RAC Fuel Watch reports

In November, the average price of petrol in the UK fell by 7.5p per litre, reaching 146.95p. However, according to the latest data from RAC Fuel Watch, drivers are still being overcharged by 10p per litre and are far from getting a fair price at the pumps, despite recent government intervention.

Diesel prices also saw a decrease of almost 7p per litre, bringing it down to 154.40p. However, similar to petrol, diesel prices continue to be inflated by 5p per litre due to retailers not passing on the savings from lower wholesale costs.

The analysis conducted by the RAC reveals that the average retailer margin on petrol has now reached 17p per litre, compared to the long-term average of 7p. Similarly, the retailer margin for diesel has climbed to 13p per litre, exceeding the usual average of 8p. This increase in retailer margins coincides with the expectation that drivers would benefit from a 5p per litre duty cut implemented in March 2022. Unfortunately, it is the major retailers who are profiting from this, while drivers have suffered an estimated loss of £184m over the past two months due to the failure to pass on the duty cut.

The RAC believes that petrol should be priced at an average of 137p per litre and diesel at 150p per litre, based on a fairer margin for retailers. This means that drivers are currently paying approximately £5 more than they should be to fill up an average 55-litre family car. For diesel, the overcharge amounts to about £2.50 per fill-up.

Interestingly, membership-only retailer Costco is currently offering petrol at an average price of 133.7p per litre and diesel at 144p per litre, which is 14p and 11p less than the UK average, respectively. In Northern Ireland, the prices for unleaded and diesel are even lower at 141.4p and 149.5p per litre, respectively.

The RAC's fuel finder feature in the free myRAC app highlights an independently run forecourt called Grindley Brook in Whitchurch, Shropshire that charges just 131.9p for petrol, matching Costco's cheapest price. This is 15p less than the UK average. Additionally, Grindley Brook offers diesel at a price of 143.9p per litre, which is 10.5p lower than the UK average. In comparison, the big four supermarkets have an average price of 143.37p for unleaded and 151.48p for diesel.

According to RAC Fuel Watch data, the wholesale price of petrol witnessed a 9p per litre drop in November, while diesel experienced a decrease of 7p per litre. These price reductions were a result of oil averaging $84 throughout the month and the pound gaining value against the dollar. As of now, retailers pay just 106p per litre for unleaded and 117p per litre for diesel.

Despite these significant drops in wholesale prices, drivers in the UK continue to pay more than they should at the pumps. The RAC calls for retailers to charge fairer prices, providing relief to drivers who have been overcharged for months.

RAC fuel spokesman Simon Williams said: “While the price of fuel fell in November, the truth is there is no reason whatsoever for drivers to be jubilant as the data clearly shows they are continuing to get a rough deal at the pumps, unless they live in Northern Ireland. Wholesale fuel costs have been falling for months, so they should be paying around 137p for petrol, instead of a whopping 147p. Diesel is also overpriced at 154.40p when it should be on sale for under 150p.

“This is extremely worrying as the biggest retailers don’t seem to have heeded the warnings levelled at them by Energy Secretary Claire Coutinho at the end of October saying she wouldn’t hesitate to call out those that rip off the public.

“While the Energy Secretary’s action may have encouraged retailers to begin reducing their prices, it’s undoubtedly a case of far too little, far too late. The wholesale market data the RAC analyses shows the true picture and unfortunately, for the Government and drivers, it shows the 5p-a-litre duty cut is not getting to drivers at all, and prices aren’t falling nearly fast enough yet again.

“We’ve contacted her department to explain what’s really going on with a view to prompting greater and more effective intervention. If a price monitoring body had already been set up by now – as recommended by the Competition and Markets Authority and accepted by the Government – then this might have been prevented and people might finally be getting a fairer deal at the pumps.

“We reiterate our call to the biggest retailers to significantly cut their prices to mirror what’s happening with greatly reduced wholesale costs.”