The RAC has praised independent retailers for leading the way in cutting prices and prompting the recent cuts by supermarkets, after the average price of petrol fell in July by nearly 9ppl (8.74ppl) to 182.69ppl.
According to RAC Fuel Watch this means nearly £5 has been cut from the cost of filling a 55-litre tank of petrol (£105.29 down to £100.48).
Diesel came down by almost 7ppl (6.69ppl) from 199.07ppl at the start of the month to 192.38ppl by the close, reducing the cost of filling a 55-litre tank by £3.68 (£109.41 down to £105.81).
While these are the third and fourth biggest monthly reductions respectively in the last 20 years, the RAC insists they still don’t fairly reflect the fall in the wholesale price of fuel, and says major retailers should be cutting pump prices much further.
The wholesale cost of petrol delivered to forecourts has fallen for eight consecutive weeks by 20ppl from 151.93ppl at the start of June to 131.75ppl in the last week of July. The last time unleaded was this price on the wholesale market was in early May, and a week later this led to a UK average pump price of just 167ppl.
Based on average wholesale prices last week, the RAC estimates petrol should be around 167ppl and diesel should be closer to 182ppl.
RAC fuel spokesman Simon Williams said: “July has been an unnecessarily tough month for drivers due to the big four supermarkets’ unwillingness to cut their prices to a more a reasonable level, reflecting the consistent and significant reductions in the wholesale cost of petrol and diesel.
“As it was, we saw independent retailers leading the charge with fairer pump prices appearing all around the country which eventually forced the supermarkets to finally implement a more substantial cut late last Friday afternoon (29 July).
“What ought to have happened is that the biggest retailers cut their prices more significantly on a daily basis, given the wholesale price of petrol has fallen steadily over the past eight weeks. Instead, average retailer margin for petrol across the industry has been up around 20ppl for the last two weeks – more than three times its long-term average.
“The average cost of delivered wholesale unleaded in the first week of May was 131.73ppl which gave rise to forecourt prices across the country hitting 167ppl a week later. Wholesale petrol averaged virtually the same last week which should – if retailer’s pass on the savings they’re benefitting from – in theory bring pump prices down to a similar level to what we saw in mid-May.
“The best advice for filling up is no longer to assume the supermarkets are the cheapest, but to shop around as it’s highly likely you’ll find an independent retailer which is doing the right thing and fairly reflecting their lower wholesale costs by charging a lower price. This is really encouraging because the independents buy new stock less frequently than the supermarkets as they don’t sell as much, and consequently aren’t as well positioned as their rivals to be able to snap up fuel at lower prices when there are sudden market drops.”