Supermarkets have cut rip-off diesel prices by 7p-a-litre since watchdog report
Supermarkets have slashed prices for scam diesel by 7p a liter in the days since a watchdog found evidence that retailers are taking bigger margins on fuel
- Diesel prices at major retailers have fallen since a recent watchdog report
- CMA had evidence in May that retailers were pushing fuel prices higher than necessary
- RAC says diesel drivers ‘continue to get a bad deal’ as prices should be 6p lower
Supermarkets have slashed the price of diesel by 7 pence a litre, amid threats of legal action from the competition watchdog.
Automotive groups suggest the shops feared an investigation by the Competition and Markets Authority would find them guilty of ripping off drivers.
Initial findings of a CMA study of prices showed that they were higher than could be explained by the impact of the war in Ukraine.
Since May 15, when the regulator noted an increase in profit margins, the average price per liter of diesel in supermarkets has fallen by 7.44 pence – from 151.02 pence to 143.58 pence.
But the RAC said it could be cut by 6p more.
Lower fuel prices out of fear? Major retailers, including supermarkets, have slashed their diesel prices by 7p a liter since May 15 – the date the CMA reported it had evidence they were keeping the price much higher than they should be and taking larger margins on fuel
The automotive group said major retailers’the pace of diesel price cuts has accelerated since the watchdog expressed concerns last month about weakening competition in the retail fuel market.
It comes after the RAC and other automotive groups have spent months calling on the largest retailers to lower the price of diesel after seeing the wholesale cost of the fuel fall consistently below that of petrol from the end of March.
But while the four major supermarkets sold unleaded for about 143 pence per liter throughout April, the average price of diesel at their locations remained stubbornly high, dropping only 10 pence per liter (161.4 pence to 151.02 pence) in the month prior to the CMA announcement, when it should have been a similar price to gasoline.
The difference between the average price of a liter of petrol and diesel in supermarkets was 9 pence on May 15, but by Monday the difference had shrunk to just 2.5 pence.
The RAC says this is a ‘further indication that these retailers have apparently been pushed into action by the CMA’.
Nevertheless, the RAC has calculated that – assuming current wholesale prices – supermarket diesel should be around 137 pence per liter if a fair price were charged.
RAC fuel spokesman Simon Williams said: ‘Since the Competition and Markets Authority made its announcement that supermarkets are increasing their margins compared to three years ago and said they will formally interview bosses, it seems the rate at which the price of diesel has fallen , has been accelerated. upwards.
“Significant reductions in the price of diesel at the supermarket are long overdue, as the wholesale price has been below that of petrol since the end of March.
“The result was that the average retail margin on diesel was 22 pence per liter – more than three times the long-term average of 7 pence.”
Last month, in an ongoing study of the fuel retail market, the CMA said it is concerned about the “continued higher margins on diesel compared to gasoline” so far this year, which “appear to be lasting longer than expected.”
Chief executive Sarah Cardell said the watchdog was not satisfied with evidence from supermarkets as to why prices were so high and said they will call them for “formal interviews to get to the bottom of what’s going on.”
A full final report with recommendations will be published in early July.
The difference between the average price of a liter of petrol and diesel in supermarkets was 9 pence on May 15, but by Monday the difference had shrunk to just 2.5 pence
Despite 27p being shaved off the price of a liter of diesel since the start of the year, the RAC says diesel drivers are ‘still getting a bad deal’.
Williams added: “For two months it has cost retailers less to buy wholesale diesel than petrol, yet they continue to charge more for diesel at the pump.
“While changes in wholesale prices take some time to trickle down to smaller filling stations that only buy new stock every few weeks, we see no reason why the supermarkets still haven’t lowered their prices to fairer levels as they are much more likely to to buy.
“We look forward to the results of the CMA assessment within the next four weeks and hope that it puts an end to the poor value at the pumps. We also hope that this will mean that the biggest retailers will start offering fair prices at all their locations across the country, not just those where they compete directly with other service stations locally.
“It can’t be that the same brand can sell for so much more fuel in one part of the country than another – this kind of postcode lottery is completely unfair to drivers and completely unjustified.”
In the meantime, drivers with a Costco membership are strongly advised to take advantage of much cheaper fuel at the wholesale gas station sites.
RAC analysis shows that the member-only retailer charges an average of just 134.5p for a liter of unleaded and 136p for diesel – nearly 10p and 17p respectively below the UK averages.