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RAC slams supermarkets fuel pricing strategy

06 January, 2016

The RAC has slammed the big four supermarkets’ fuel pricing strategy, accusing them of funding headline-grabbing price cuts in unleaded petrol before Christmas by taking a bigger margin from their diesel customers.

RAC fuel spokesman Simon Williams said: “December was an excellent month for petrol car drivers with all four major supermarkets cutting the price of petrol to under £1 a litre on 11 December. Unfortunately, despite the wholesale price of diesel being on average 2ppl cheaper than that of petrol since 8 December, we didn’t see the pump price fall to the same level until a few days ago.

“It looks very much as though the supermarkets will have attracted extra customers into their stores before Christmas with the headline-grabbing price of 99.9ppl for petrol but have cleverly made up for any lost profit by taking a bigger margin on diesel sales by not passing on the savings in wholesale price to motorists on the forecourt.

“Supermarkets play a very important role in the fuel market as, despite only having 16% of all forecourt sites, they are responsible for 44% of the volume of all fuel sales. This means their prices affect what other nearby retailers charge as well as being highly influential on the nationwide average prices of both petrol and diesel.

“Retailers have established a pretty good track record of passing on wholesale cost-savings at the pump over the period since the price of oil fell from $115 a barrel in June 2014. But not cutting the price of diesel when there was an opportunity to do so before Christmas has undermined that. While we still expect fuel prices to stay low for some time, it will be interesting to see how quickly pump prices go up again when the cost of oil rises. Of course, this tends to happen with little publicity in contrast to the fanfare that accompanies price reductions.

However he acknowledged: “For average prices of both petrol and diesel to reach the £1 a litre mark, it would require a further drop in the wholesale price of petrol to be passed on by retailers, and for diesel pump prices to more closely reflect the recent reductions seen on the wholesale market. If retail pricing more directly mirrored wholesale movements then the average price of diesel should move nearer £1 a litre, but sadly unleaded may rise due to the weakening pound.”





  • Weekly
    Retail
  • Weekly
    wholesale
  • Daily
    Average
Weekly retail fuel prices: 19 August 2019
RegionDieselLPGSuper ULUL
East132.5364.57140.16129.06
East Midlands132.1066.40141.37129.07
London131.85141.85129.52
North East130.85144.25128.58
North West131.60139.66128.82
Northern Ireland129.13134.50126.35
Scotland131.8363.30140.01129.04
South East132.8662.50141.62129.81
South West132.24138.89129.06
Wales131.09138.10128.06
West Midlands131.8660.90141.24128.98
Yorkshire & Humber131.40140.49128.65

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