The PRA has angrily hit back at claims by the AA that dealers are profiteering on the price they charge for diesel.
The AA claims that differentials between the wholesale and retail price of diesel, compared with petrol, suggest retailers are “creaming up to £1 a tank extra off diesel car drivers and up to £1.40 a tank extra off diesel van owners”.
PRA chairman Brian Madderson said: “This is another cheap buckshot from the AA which hits the independent petrol retailers. If the AA think that the independents are “creaming” the market why is the trend decline of 5,000 closures since 2000 continuing with a net 175 shutting up for business last year and a similar level exiting the market during the first half of 2013?
“Unlike supermarkets and oil companies, most dealers have no other significant income streams with which to subsidise fuel pricing. The AA are not doing their own members any service by contributing to the downsizing of the UK’s road fuel network with such irresponsible reporting. ‘Rural fuel deserts’ will become an even greater reality thanks to [AA president] Edmund King and his colleagues.”
Madderson added: “Dealers have to balance their margins over a period of time and 12 months is the accounting norm. Thus there are times when margins are very low and times when they are higher, but this does not justify sensational reports of ‘retailers creaming motorists’ or ‘retailers profiteering at the pumps’. Wholesale costs are increasingly volatile and dealers are trying hard to balance their books over the long period to have a sustainable business.”
In its June Fuel Price Report, the AA says: “Comparing the price of diesel with the price of petrol, before tax, wholesale diesel over the past month has averaged less than 2.5p a litre more expensive than petrol. Yet, at the pump with tax also stripped out, diesel has averaged nearly 3.9p a litre dearer than petrol – a 1.4p-a-litre boost to the retailer margin.
“From 14 March to the end of March, when delivered to retailers, the diesel-petrol price gap shrank from a peak of around 4.5p a litre to below a penny. At the pump, however, the price gap three weeks after peaking at 5.7p a litre had closed to 4p a litre – 1.8p adrift from where it should have been.”
The AA president commented: “To be fair, there is often much greater variation in the price of diesel among retailers in a town than with petrol. However, on average, the profit margin on diesel is consistently at least a penny higher than with petrol.
“The clear message to diesel drivers is to take advantage of the greater range of prices locally – some forecourts are more diesel-friendly than others.”
Using data supplied by Experian Catalist, the report said the UK average price of diesel has risen by around 1p a litre in the past month, from 138.17 in mid May to 139.16 now, while unleaded petrol increased from 133.35p a litre in mid May to 134.61p in mid June .
It added that after three 8p to 10p-a-litre swings in price over the past 12 months, a rise of 1p in a month represented “something of a lull”.