RAC claims that fuel prices are too high despite reduction

The RAC has claimed fuel prices are too high, but conceded independent retailers may not be able to cut prices for financial reasons.

Despite fears refinery fires in Saudi Arabia in the middle of September would lead to higher pump prices, the cost of a litre of petrol fell by just under a penny (0.87p) last month, meaning there have been two consecutive monthly drops, according to RAC’s Fuel Watch.

However, the motoring organisation claimed that the average price of unleaded at 127.95ppl is still nearly 4ppl too high because retailers were not passing on reductions in the wholesale price at the forecourt.

The RAC said Northern Ireland stood apart from the rest of the UK with much lower average fuel prices. In Northern Ireland the average price of a litre of unleaded is 125.87p, 2ppl cheaper than the UK average, and diesel, which rose 0.35ppl to 132.07ppl, is more than 2ppl less in Northern Ireland.

RAC fuel spokesman Simon Williams said: “Currently, the prices drivers pay for fuel in Northern Ireland are on average 2ppl cheaper than the rest of the UK, which means retailers in the rest of the UK are charging more than they should. If they can afford to charge less there, they can afford to elsewhere. This can only mean that drivers in the rest of the UK are being taken advantage of.”

The big four supermarkets were charging an average of 123.90ppl for unleaded – down 1.21ppl on August – and 127.88ppl for diesel – up 0.22ppl. This means buying from a large supermarket is 4ppl cheaper for both petrol and diesel than the UK average.

Williams added: “Generally, supermarket fuel tends to be 3p a litre cheaper than the UK average. We have on occasion seen some much bigger differences between the supermarket average and the UK average prices. If supermarket fuel is priced much lower than the UK average as it is now, this usually indicates independent retailers aren’t passing on enough of the savings in the wholesale price.

“This doesn’t mean there isn’t scope for the supermarkets to do more by lowering their prices, it means that independent retailers simply are choosing not compete as much or simply aren’t able to for financial reasons.

“The outlook for drivers at the pumps is looking reasonable despite the refinery attacks in Saudi Arabia. Not only was the impact of the resulting drop in production lessened by Saudi’s state-owned oil company releasing crude reserves, fears of a global economic slowdown caused the oil price to reduce. If this continues, it should translate into lower pump prices for drivers in the UK.”