Britain’s biggest fuel retailers are charging an extra 5p for every liter of petrol sold to drivers, according to the latest report.
The RAC said the average price of lead-free products is 155.3 pence per litre, but should fall to 150 pence based on wholesale costs for retailers in recent weeks.
According to the report, the failure to pass on these savings is akin to retailers pocketing those from the government Shortly after Russia’s invasion of Ukraine last year, a 5 cent tax cut was introduced to help struggling families cope with the cost of living crisis.
Instead, the RAC says the fuel duty cut is only intended to ‘help retailers who have chosen to increase their margins’, which should leave drivers and the Treasury ‘furious’.
‘Both drivers and the Treasury should be rightly furious’: The RAC says Britain’s biggest petrol retailers are pocketing the 5p per liter fuel duty cut the government introduced in March 2022 to help struggling families during the cost of living crisis
A barrel of oil trades at about $90, meaning the wholesale delivered price of gasoline last week averaged just over 113 cents.
While the average price for lead-free products in Britain is 155.33 pence, the average retail margin was over 16 pence per liter, excluding VAT.
“This is in stark contrast to the long-term average of 7 cents per liter and is indeed much higher than the 10 cent margin that smaller, independent retailers now consider reasonable due to inflation,” the RAC explains.
Even diesel, which currently costs an average of 162 cents nationwide, is estimated to be about 4 cents per liter overpriced.
Last week a liter of wholesale diesel averaged 123 cents, meaning the average margin for retailers is around 12 cents, compared to the long-term figure of 8 cents that the RAC has maintained since 2012.
Failure to reduce pump prices to a fairer level when there is a clear opportunity to do so will keep inflation artificially high – which is clearly in no one’s interests, says the RAC
The news of much higher than average margins that emerged from the RAC’s analysis is said to be ‘very concerning’ as the Competition and Markets Authority (CMA) completed its investigation in the summer and found that the big four supermarkets were charging drivers charged 6 cents too much. -a liter in 2022, costing them around £900 million.
The RAC is concerned that recent history already appears to be repeating itself.
The watchdog’s report recommends that retailers be required to provide real-time pump prices by location and that a price monitoring body be established – which the government has promised to legislate for.
After being strongly encouraged by the former Energy Minister to publish prices before it became a legal requirement, many larger retailers have even started to do so.
Unfortunately, there is no news yet on when a pump price watchdog could be established.
RAC fuel spokesman Simon Williams said: ‘Our analysis unfortunately shows that despite the CMA investigation confirming that drivers were being cheated at the pumps – something we have been saying for years – and the Government acting on the findings, nothing is changed.
“Drivers continue to suffer huge losses when wholesale prices fall.”
The RAC has calculated the average retail margins on both petrol and diesel over the past eight years, showing that they are making much bigger profits today than in 2016. There has been an average margin increase of almost 5 cents per liter before and after the Ukraine war, says it
However, not all drivers in the UK are ripped off by retailers.
In Northern Ireland, where supermarkets do not dominate fuel sales, motorists would get a fairer deal with a liter of unleaded petrol costing 150 pence and diesel 157 pence – 5 pence less than the British average.
Mr Williams said both drivers and the Treasury should rightly be “furious” that the 5p per liter duty cut – which has been in place since the end of March 2022 – is not being passed on to petrol stations.
‘From studying RAC Fuel Watch data there is no doubt that margins have gone up across the board, and while retailers claim their costs have risen due to inflation, the irony remains that there is a clear relationship exists between pump prices and consumer price inflation.
‘Failure to bring pump prices to fairer levels when there is a clear opportunity to do so will keep inflation artificially high – which is clearly in no-one’s interests.
‘Our data shows the big four supermarkets’ margin on petrol this month is around 14 cents, compared to an average of 7 cents so far this year. And, shockingly, this is an increase from just 3.4 cents for all of 2019.”
He added: ‘We urgently need a government to set up the CMA’s recommended price monitoring body and give it powers to take action against major retailers that do not reflect downward movements in the wholesale market such as we have experienced. in the past six weeks.
‘We have told the Treasury that the 5 cent duty cut is not helping drivers as intended, and we are now calling on the big four supermarkets, which lead the retail market because they sell around half of all fuel sold by the government is purchased. drivers, to explain their steadfast refusal to lower prices to fairer levels.
‘Unfortunately we know this is highly unlikely and instead we will get at best another banal statement from the British Retail Consortium, while independent retailers will feel the need to defend themselves, despite recognizing that this is not an issue is. of their making.”
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