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The average forecourt margin on unleaded fuel fell from 10.5p at the beginning of March to 8p a litre at the end of the month

The average forecourt margin on unleaded petrol has reduced during March, largely because of an increase in the cost of wholesale petrol, as well as perhaps greater scrutiny on what forecourts are charging, says motoring organisation the RAC.

According to RAC Fuel Watch, the average forecourt margin on unleaded fuel fell from 10.5p at the beginning of March to 8p a litre at the end of the month. At the same time the average margin on diesel was at 11p, up by a penny over the same period.

The data, taken from the Competition and Market Authority’s voluntary fuel pricing scheme, shows that unleaded petrol went up nearly 2p (1.86p) a litre in March from 144.62p to 146.48p meaning the average price at the pumps has increased almost 6p since the start of the year. Diesel rose by more than a penny from 154.68p to 155.99p (1.31p), making for three consecutive months of rises.

While the increase in forecourt prices was driven by a 5% rise in the cost of a barrel of oil (from $83.55 to $87.48) in March, a surge in demand for petrol in the United States has caused the wholesale price of unleaded to rise to match that of diesel, said the RAC. This meant that by the end of March, a litre of unleaded cost 113.3p on the wholesale market, only a penny or so less than diesel at 114.69p. If this remains the case, the gap between the two fuels at the pumps should close from its current 7p in the next few weeks, it added.

RAC fuel spokesman Simon Williams said that it was good to see the average retailer margin on petrol come down. While the cause is most likely to be the increase in the wholesale price of petrol, it could also be due to the CMA again raising concerns about higher retailer margins very publicly just last week, he believed.

Of the big four supermarkets which dominate UK fuel retailing, Tesco had the cheapest unleaded on 31 March at an average of 142.7p across its 511 forecourts, while Asda had the most expensive at 145p. Asda, which for many years has prided itself on selling the lowest-priced supermarket fuel, also had a “whopping” 34p price difference between its cheapest and most expensive petrol, said the RAC. The grocer charged 138.7p at its Guildford forecourt and 172.9p at junction 29A of the M1 near Sheffield – a Shell-branded site operated by Asda. Comparatively, Tesco had the smallest difference between its lowest and highest prices at just 6p (138.9p versus 144.9p).

“Sadly, Asda appears not to be the force it once was in fuel retailing,” said Williams. “Gone are the days when it used to announce big headline-grabbing pump price cuts when wholesale prices fell, along with a promise at the time that drivers would never pay more than a certain low price at any of its forecourts.”

The data also highlighted that the supermarkets are inconsistent in their fuel pricing, with Asda, Sainsbury’s and Morrisons only offering their cheapest prices at one or two stores, whereas Tesco offers its best per litre offering at around 30 forecourts.

Williams called for the end to what he described as a “postcode lottery” on fuel prices, with BP and Shell-operated forecourts, for example, having very large differences between their cheapest and highest fuel prices. For unleaded, BP had a gap of 27p (142.9p versus 169.9p) and Shell 26p (143.9p versus 169.9p). 

For diesel, Sainsbury’s and Tesco were head to head for the lowest average price across their portfolios at a respective 151.7p and 151.8p. Asda’s gap between its cheapest and most expensive diesel was 35.2p (charging 147.7p at Guildford, Torquay and two in Northern Ireland, compared with 182.9p at the Shell-branded site it runs near junction 29 of the M1).