Breakdown and insurance firm the RAC has implied fuel retailers are not treating motorists fairly in its latest ‘fuel watch’ press release.
The private-equity and sovereign-wealth-fund owned company says unleaded rose from 157p to 159.4p (2.4p) in May, while diesel fell from 188.4p to 183.9p. Based on those figures, data from Edge Petrol indicates retailers made an average margin of 7.9%. By contrast, the RAC’s latest accounts boast of a 38% margin.
Nonetheless, the RAC continues to pass judgement on the fuel-retailing market, quoting the Competition and Markets Authority’s latest analysis, which accuses the sector of “pursuing largely passive pricing policies rather than actively competing to win customers”.
The CMA concedes in the same report, however, both that it has “not seen evidence of retailers changing their pricing strategies to take advantage of the [Iranian] crisis”, and that it uses the same “simple” metric of comparing wholesale and retail prices as the RAC when calculating margins, ignoring “other costs of doing business in this market”.
This approach was blasted by the Petrol Retailers Association, whose executive director, Gordon Balmer, deemed it “hugely disappointing” that the CMA did not factor in rising crime rates, tax, energy and staff costs in its report, which he said “does not provide a complete analysis” of the sector.
The RAC’s head of policy, Simon Williams, says it was “quite unusual” to see diesel fall in price while unleaded rose, hypothesising this was done because “retailers decided to keep the price of unleaded down at the expense of greater diesel reductions”.
Williams adds: “We hope its next report shows that drivers have been treated fairly by retailers reducing their pump prices in line with the fall in wholesale costs.”
