Diesel and petrol price gap reaches a record 20p a litre

If you drive a diesel car, look away now.

That’s because a liter – for the first time in history – is more than 20 cents more expensive than gasoline.

Average UK pump prices on Wednesday sold unleaded at 163.13 pence, while diesel was 20.81 pence higher at 183.94 pence per litre. It means that drivers of diesel family cars are currently paying £11 more each time they fill up.

The RAC confirms that yesterday was the first time a liter of diesel was 20 pence higher than unleaded since registration began.

That makes diesel 13 percent more expensive to purchase than petrol.

For a family hatchback with a 55-litre fuel tank, filling up with a diesel now costs an average of £101.17, while for a petrol equivalent it’s just £89.72.

While the price of diesel has historically been high for motorists in Britain, the size of the current price gap is much wider than we have seen in the past 20 years.

Diesel prices in the UK have typically been around 5 cents per liter more than petrol since 2003, but the outbreak of war in Ukraine in 2022 has dramatically widened this gap.

The price gap between a liter of unleaded and diesel has widened in recent months as Russia reduced its gas supplies.

This has led to an increase in the use of diesel for heating and power generation, especially in continental Europe.

And as diesel demand has increased in recent weeks, the end of the so-called driving season in the US has seen gasoline demand plummet, widening the price differential between the two fuels.

Last week’s announcement of OPEC+ has also accelerated the price gap on the news that it reduces oil production by two million barrels per day.

This led to an immediate surge in the wholesale price of refined fuel, with oil trading above $90 below that mark late last month.

RAC fuel spokesman Simon Williams said: ‘Since OPEC+ and its allies agreed to significantly cut oil supplies, we have seen the price of wholesale diesel rise by 9 cents per liter and petrol by 4p per litre.

‘This has resulted in the average pump price of diesel rising by almost 4p per liter and of petrol by almost a cent.

“Unfortunately for diesel drivers, the situation certainly looks set to get worse with prices going back to 190 pence per litre, which will add £3 to the cost of a tank.”

Pump prices hit an all-time high in early July 2022 when diesel reached an average of 199 pence per liter in the UK and petrol at 191.5 pence.

Commenting on the widening price gap between the two fuels last month, Steve Gooding, the director of the RAC Foundation, said increased demand for diesel as a heating and energy source could extend the price gap even further into the winter months.

“As supplies from Russia have dwindled due to the war in Ukraine, this means that many people are looking for less supplies,” he explains.

The bad news for British diesel drivers – and the UK’s diesel truck dependent freight industry – is that with winter just beginning and the war in Ukraine showing no sign of an end, the significant difference between diesel and petrol pump prices is likely. . to continue for several more months, even if the oil price falls.’

In July, a survey by the Competition and Markets Authority into the road fuel market found that ‘the main drivers of increased road fuel prices are: the rising cost of crude oil; and a growing gap between the price of crude oil and the wholesale price of petrol and diesel – the so-called ‘refining spread’.’

The CMA said “the refining spread has tripled in the past year, from 10 cents to nearly 35 cents per liter.”

Today, the government officially responded to the CMA’s findings, saying it backed its recommendations for an ‘open data scheme’ to provide drivers with up-to-date information on prices at nearby petrol stations.

However, it was less in favor of greater transparency on highway fuel prices, with the CMA saying this should be displayed on portals before drivers decide to drive off the highway and go to gas stations.

RAC fuel spokesman Simon Williams said it is “encouraging” to see the government talking about an open data scheme.

“Hopefully this would also lead to more customization for the lowest-priced retailers and encourage others to price more competitively,” he said.

“Of course there is a danger that retailers will only ‘match’ each other at levels that still don’t accurately reflect wholesale prices.”

The CMA has already pledged to examine the fuel retail market more thoroughly in an effort to shed some light on why the largest fuel retailers have significantly increased their profit margins in recent weeks rather than pass lower prices on to drivers at their pumps in the cost of living. crisis.

This has led to an ‘unusual situation’ where many smaller service stations charge far less than their larger rivals, including supermarkets.

Simon Williams said: ‘As supermarkets normally price their fuel 4p lower than the average UK drivers who continue to fill up at their petrol stations without looking around, they may have lost significantly.

“Besides knowing where to buy the cheapest fuel, drivers also need an indication of whether retailers are charging a fair price at all.”