Despite falling wholesale prices, UK drivers are continuing to suffer from overpriced fuel, the RAC’s fuel experts have warned.
Supermarkets made a token gesture on 6 November, promising price cuts of up to 2p per litre of unleaded. But RAC data shows that in reality less than a penny has come off the average price of a litre of supermarket petrol since then – down from 127p per litre to just 125.36p, despite a tumbling wholesale price. The effect on average UK petrol prices has therefore been negligible, down from around 130p per litre to 128.8p per litre as fuel companies and smaller retailers tend to follow the supermarkets’ lead.
In fact, wholesale petrol prices have fallen by nearly 9p per litre since the start of October, largely as a result of a sharp drop in the cost of oil – down a dramatic $20 a barrel in this time and currently standing at $65. Yet since the start of October, only 1.56p per litre has come off the average price of a litre of unleaded at UK supermarkets suggesting retailers still have a long way to go to correct the prices they are charging at forecourts.
RAC fuel spokesperson Simon Williams said: “Put simply, the big retailers have not gone nearly far enough in cutting prices at the pumps, despite the fact the cost of buying the fuel on the wholesale market has dropped like a stone.
“The net result is Christmas coming early for retailers, as they are making considerably higher profits from every litre of fuel they sell now than they normally do. But drivers, many of whom we know rely on their vehicles, continue to suffer from over-inflated prices at the pumps.
“Drivers have a right to feel taken advantage of right now. Wholesale petrol prices are tumbling, yet retailers are steadfastly refusing to drop prices and charge a fair price on forecourts across the UK. And without significant price movement from the supermarkets, there is little to encourage smaller retailers to shift their own prices to the benefit of consumers.
“While the pound has weakened slightly against the dollar, which means it costs a little more for retailers to purchase fuel in the first place, this hasn’t been enough to offset the collapse in the oil price and means there is tremendous pressure for some significant price cuts at forecourts. The question drivers should be asking is why retailers have hardly budged on prices, and when the cuts will finally come.
“We will be among the first to welcome price cuts from the supermarkets, but our data shows that something is clearly awry with petrol pricing at the moment and drivers should be seeing 5p per litre reductions across the country. Diesel prices should also now be starting to fall, again triggered by the drop in the cost of oil.”
The falling oil price, which has caused the sharp drop in wholesale petrol and diesel prices, has been caused by increased concerns about an oversupply of the product onto world markets – something which last occurred in 2014 and lead to historically low oil prices.