The RAC has blamed supermarkets for causing the worst case of rocket and feather pricing ever seen in the fuel market.
Despite the average price of petrol and diesel falling by 6ppl in November, the RAC claims the reductions on the country’s forecourts should have been at least twice that to match the fall in wholesale prices.
Unleaded came down from 165.96ppl to 159.88ppl while diesel dropped from 190.31ppl to 183.87ppl. It now costs £91.28 to fill up the 55-litre tank of a family-sized petrol car and £101.13 for a similar diesel vehicle.
The reason the RAC believes prices at the pumps should have been lower is because the wholesale price of petrol fell by 11ppl in November from 122.63ppl to 111.53ppl on top of significant reductions in late October.
Diesel decreased by even more last month, coming down 15ppl from 143ppl to 128ppl. Taking an average of wholesale prices for the last week of November (21-25), the RAC believes petrol should really be at an average of 146ppl and diesel should be 169ppl – 14ppl and 15ppl lower than the current averages.
Consequently, the RAC believes retailers are now collectively making margins of more than 20ppl.
A litre of unleaded bought at a supermarket on average costs 158.31p – down 6p in the month – but now only 1.6p lower than the UK average. Supermarket diesel at the end of November was down 3.7ppl to 182.74ppl, only a penny below the average price across the country. Long-term RAC data shows that both fuels are normally 3.5ppl cheaper when bought at a supermarket.
RAC fuel spokesman Simon Williams said: “It’s bordering on a scandal that drivers are being overcharged so much because the big four supermarkets, which dominate UK fuel retailing, are flatly refusing to reduce their prices by bigger amounts. Their prices are dropping like a feather when they should be falling like a stone.
“In 10 years of closely monitoring fuel prices we have never seen major retailer margins this high for this long. It used to be the case before the pandemic that we’d see wholesale prices drop by 4p a litre and then the supermarkets would be vying with one another to announce a price cut to drive customers into their stores.
“This sadly seems to be a thing of the past as nowadays they appear to be hanging on to massive margins for dear life. This is to the detriment of everyone because, of course, other retailers won’t be encouraged to reduce their prices meaning the UK average stays artificially high.
“We have more sympathy for smaller retailers that don’t buy new stock as often as their larger competitors and need larger margins to stay afloat – to their considerable credit, some have lowered their prices drastically, undercutting the supermarkets by a huge amount. We’ve had reports of independent retailers selling petrol for as little as 140ppl, which is 18p lower than the supermarket average.
“While every retailer is free to charge what they like for their fuel it doesn’t seem fair that some of the biggest retailers appear to be taking advantage of their hard-pressed customers in the run-up to Christmas by making well over 10p more on a litre than they used to. We strongly urge every driver not to automatically assume their local supermarket is the cheapest place to fill up and shop around for the best priced fuel.
“We saw some similar fuel pricing behaviour from the big chains last Christmas but despite this, we believe this is probably the worst example of ‘rocket and feather’ pricing we have ever seen. We hope the Competition and Markets Authority, which is currently investigating UK fuel retailing, is paying close attention.
“We would also remind the supermarkets that the Government’s 5ppl duty cut is still in place and is intended to ease the burden on drivers.”