Are drivers being ripped off at fuel pumps? RAC reckons yes

The RAC has been crunching some numbers and it turns out – if we weren’t already aware from the hole in our wallers – that UK drivers are paying too much for fuel (well, except those in Northern Ireland but we'll come onto that). It’s calling on all major fuel retailers to cut their price-per-litre by five pence.

The data suggests petrol price margins are around 16p on average. This is drastically higher than the long-term average of 7p-a-litre and the margin smaller, independent retailers are applying of 10p-per-litre.

The RAC reckons diesel is affected too, with price margins averaging four pence more than they should. What’s going on? The consumer motoring association is arguing that the fuel duty cut of five pence - introduced last year - is being swallowed up by retailers.

Wholesale costs started going down at the start of October, but the prices on the forecourts haven't necessarily reflected those decreases.

Simon Williams, RAC fuel spokesman said: “Our analysis sadly shows that despite the Competition and Markets Authority’s investigation confirming drivers were being ripped off at the pumps – something we have been saying for years – and the Government acting on the findings, nothing has changed. Drivers are still losing out massively when wholesale prices come down."

The difference for drivers in Northern Ireland is that the supermarkets don't dominate the sale of fuel, whereas the big four account for around 50 per cent of fuel sold in England, Scotland and Wales. As a result, they're getting a fairer deal from their independent retailers, with petrol averaging £1.50-per-litre and diesel a respective £1.57-per-litre on average. That's about five pence more than the rest of the UK is paying.

Williams added: "Drivers and, indeed, the Treasury should be furious that the 5p-a-litre duty cut, which has been in place since the end of March 2022 is not being passed on at forecourts. There is no doubt from studying RAC Fuel Watch data that margins are up across the board, and while retailers argue their costs have increased due to inflation, the irony remains that there is a definite link between pump prices and consumer price inflation.

"A failure to cut pump prices to fairer levels when there is a clear opportunity to do so has the effect of keeping inflation artificially high – which is clearly in nobody’s interest. Our data shows the big four supermarkets’ margin on petrol has been around 14p this month compared to an average of 7p so far this year and, shockingly, this is up from just 3.4p for the whole of 2019."

Though supermarkets have made efforts to publish live prices, following the CMA's conclusion from its investigation, and comparing fuel prices is easier in your local area using apps like myRAC and PetrolPrices.com, the RAC still thinks the retailers could and should go further. Williams concluded: “We badly need the Government to set up the price monitoring body recommended by the CMA and for it to carry powers to take action against big retailers that don’t reflect downward movements in the wholesale market such as we’ve been experiencing in the last six weeks.

“We have informed the Treasury that its 5p duty cut isn’t helping drivers as intended and we’re now calling on the big four supermarkets, which lead the retail market by virtue of the fact they sell around half of all the fuel bought by drivers, to explain their steadfast refusal to  cut prices to fairer levels.

“Sadly, we know this is highly unlikely to happen and instead, at best, we’ll get another banal statement from the British Retail Consortium while independent retailers will feel the need to defend themselves, despite us recognising that this isn’t a problem of their making.”