- AA says unfair prices in retailers are costing drivers £2 every time they fill up
- It accused them of ‘rocket and feather prices’
Fuel retailers are still using the ‘same old’ feather and rocket tactics to dupe British drivers at the pumps, despite ongoing attempts to curb the practice, the AA says.
In recent days, gas stations have been using “rocket and feather” pricing, meaning they don’t pass on the lower wholesale costs nearly as quickly as they raise pump prices when they rise.
This is despite the government trying to iron out the details of a new policy to make it mandatory for fuel companies to be transparent about their petrol and diesel prices.
This week saw the first drop in average fuel prices since the start of the year.
While the reduction in the cost of a liter of petrol and diesel seems long overdue, what motorists pay at the pump is still much higher than it should be, the AA said.
Since mid-April – just over a month ago – the wholesale cost of gasoline has fallen by about 4 cents per liter.
Yet the average cost of lead-free products in Britain has fallen by just a penny in the past ten days, with retailers pocketing the difference.
“In addition, the premium for diesel, which at the pump averages around 7 cents per liter more than that for petrol, while wholesale prices are almost neck-and-neck, needs to be re-explained,” the AA explained.
This will not only sting the pockets of the country’s drivers, but also “put a significant brake on efforts to reduce inflation,” the automotive body added.
The hope is that the introduction of a ‘PumpWatch’ program will draw attention to fuel companies that overcharge at petrol stations and pocket higher margins.
All petrol stations in the UK would be legally required to share real-time price information within half an hour of increasing or decreasing prices.
Analysis of fuel prices shows that retailers’ average profit margin – the difference between the amount they pay for fuel and the price they charge at petrol stations – currently stands at almost 18 cents per liter for diesel and almost 14 cents per liter for petrol.
In the decade leading up to the Covid pandemic, the average profit margin on both fuels was just 8 cents.
It means that the combination of fairer prices and companies cutting margins could save petrol car drivers around 8 cents per liter at the pump.
Although the reduction in the cost of a liter of petrol and diesel is long overdue, what motorists pay at the pump is still much higher than it should be, the AA said.
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In a letter sent to energy secretary Claire Coutinho last week, the RAC said the competition watchdog should be given the power to take “meaningful action” against fuel companies that overcharge their drivers for petrol and diesel.
Today, fourteen of the largest fuel retailers voluntarily share daily price data through the Competition and Markets Authority (CMA) programme.
However, ministers are said to be ironing out the finer details of making this mandatory across the entire network of retailers.
Luke Bosdet, the AA’s spokesman on fuel prices. says too few retailers are driving down the UK’s average pump price as quickly as drivers and the country’s fight against inflation need.
‘The fuel trade is trying to change the narrative on pump prices, focusing on higher costs.
‘But when barely weeks later you see a drop in wholesale costs equivalent to a £2 saving on a tank of fuel, it looks very much like the same old story.
‘And when it’s clear that some retailers are cutting prices, you have to wonder what’s holding the majority back?
Currently, the pump price of petrol in Britain averages 149.0 pa liter (fuelpricesonline.com, from CMA data), after peaking at 150.1 pence in the last week of April.
Diesel currently consumes an average of 155.8 pence, after a peak of 158.3 pence last month.
An analysis of petrol pump price data submitted to the CMA by the four supermarkets and four of the main oil companies, covering 2,861 petrol stations, shows that on Tuesday 23.2 per cent were charging at least 150 cents per litre.
Only three offered petrol for less than 140 pence per litre: one in Newtownabbey in Northern Ireland, one near Guildford and one in Llangefni on the Isle of Anglesey.