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RAC says it is hopeful that “fairer prices” will come with the Digital Markets, Competition and Consumers Act, which became law on Friday

The RAC is turning to the continent now to strengthen its argument that forecourt operators in the UK charge too much for fuel, this time pointing out that the UK has the most expensive diesel in Europe.

It says that the average price of diesel at UK pumps is currently 155p, 5p more expensive than both Ireland and Belgium at 150p, based on the latest data from the Competition and Markets Authority, and the European Commission’s Weekly Oil Bulletin.

The motorist campaigning group says that the higher retail is despite duty on both petrol and diesel having been cut from 57.95p to 52.95p in spring 2022 to ease the burden of rapidly rising fuel prices following Russia’s invasion of Ukraine.

It concedes that the UK has the highest rate of duty on diesel in Europe alongside Italy, but adds that diesel is currently 7p cheaper in Italy, where it is an average of 148p a litre.

And while France’s duty rate is the equivalent of a penny lower than the UK at 52p, it says, its average price for diesel is 9p less at 146p. In Belgium, where duty is the equivalent of 2p less than the UK at 51p, its diesel is 5p cheaper at 150p.

RAC fuel spokesman Simon Williams said that the average retailer margin on diesel at 18p in the UK is “shocking”, with its Fuel Watch calculations showing that it is 10p more than the long-term average of 8p.

He says that despite the RAC bringing the issue to the attention of Energy Secretary Claire Coutinho in a letter just over a week ago, the price of diesel at the pump has barely fallen, even though the wholesale prices of petrol and diesel are identical at just 111p a litre.

”The average price of a litre of diesel should really be down to around the 145p level if retailers were charging fairer prices. The margin on petrol is also, in our view, unreasonably high at 13p,” he said.

“We can see no good reason why retailers in Great Britain aren’t cutting their prices at the pumps. It’s important to note that in Northern Ireland, where there is greater competition for fuels in the absence of supermarket dominance, the average price of diesel is just 144.9p – 10p less than the UK average, and petrol is 6p cheaper at 142.4p.”

However, Williams says he is hopeful that “fairer prices” will come with the Digital Markets, Competition and Consumers Act, which became law on Friday, giving new powers to the Competition and Markets Authority to closely monitor road fuel prices and report any sign of malpractice to the government.

The PRA, which has consistently defended forecourt retailers’ fuel pricing, said that the higher prices for diesel in the UK could be partly attributed to the “substantial percentage of diesel transactions” being made using fuel cards, which operate on “vastly lower margins”. Also, said executive director Gordon Balmer, there are many other contributors.

“Retailers are grappling with unprecedented levels of theft, along with significant increases in business rates, energy costs, and the National Minimum Wage. These factors inevitably impact the final price at the pump.”

Balmer says that the PRA has been working closely with the government on the development of a fuel price transparency scheme and will meet with the Competition and Markets Authority in June.

“Despite the challenges posed by increased operational costs, our members remain dedicated to providing fair and competitive prices. The PRA encourages motorists to use resources such as to find the best deals available,” he said.