RMI Petrol has slammed the AA’s latest claims that UK petrol retailers are profiteering from rising fuel prices, following publication of the association’s Fuel Price Report, published yesterday.
The AA claims that European petrol prices have dropped in line with wholesale reductions but UK prices continued to rise to record highs, highlighting a need for transparency in UK pump prices, adding that had a 2p drop in the market cost of petrol been passed on to the consumer, it would have wiped out most of the impact of the 2.5p January 4 VAT rise, reducing inflationary pressure and the possibility of an interest rate rise.
Brian Madderson, chairman of RMI Petrol, said: “Once again we question the relevance and accuracy of the AA’s comparison between euro currency zone costs and pricing with the sterling influenced UK market. RMI Petrol has access to the Platts-based and highly regarded Big Oil daily cost tracking mechanism, and this confirmed that the wholesale costs to the UK independent petrol retailers showed trend increases for both petrol and diesel in January and February on almost every day. Thus there can be no case for reckless accusations, yet again, of price ‘rip-off’ by the independent sector.”
The AA report claims that in Europe, an average of pre-tax petrol prices in seven of the UK’s neighbours saw a 4.3% drop between mid and the end of January, reflecting a 4% drop in northwest Europe wholesale costs in the same period. Even with wholesale prices regaining value in February, the European average petrol pump price on February 7 was still 3% lower than three weeks before. In the UK, petrol cost 0.8% more and reached new record highs.
Edmund King, president of the AA, said: “Whether retailers are trying to compensate for lower volumes of sales or supermarkets are choosing to convert fuel cost savings into cut-price toilet cleaner offers is irrelevant. European fuel retailers, including France with its aggressive supermarket pricing, are under similar strains yet they passed on much of the wholesale petrol price reduction. They also reduced diesel prices for a while.”
“With record fuel prices a key influence on rising inflation, the AA again calls for a published track of wholesale versus pump prices, as is available in the US, Australia and South East Asia. It is time that the retailers recognised that greater price transparency will protect their interests, the consumers’ and the government’s.
“As well as the scrapping of the fuel duty increase on 1 April, the AA calls for a fuel price regulator, as is available with domestic energy – not to tell retailers how much they should sell their fuel for but as an honest broker between markets, retailers and consumers, to help clarify price movements and price differences between neighbouring towns.”