Drivers were overcharged by £5m per day in December, according to the RAC, as retailers failed to pass on reduced wholesale prices to consumers.
The RAC warned that drivers have been “taken advantage of by retailers”, with the standard margin on fuel more than doubling last month.
At a glance: 5 key points
- The average price of fuel in the UK fell by just 2p in December, despite the wholesale cost dropping significantly more than that
- As a result, petrol car drivers £5m per day, or £156m throughout the month of December, with the cost of filling up a typical family car around £6 more expensive that it should have been
- Retailers have typically put a 6p margin on the wholesale price of fuel, but throughout December after wholesale prices dropped retailers added 16p a litre on petrol and 12.5p on diesel, rather than passing on the savings to consumers
- According to the RAC, unleaded dropped from 147.47p a litre to 145.48p when prices should have been nearer to 135p, while diesel dropped by just under 2p a litre from 150.80p to 148.92p when drivers should have been paying around 142p
- A spokesperson for the Petrol Retailers Association hit back at the RAC’s claims, saying that the cost of running petrol stations “rose all year”
What’s been said?
RAC fuel spokesman Simon Williams said: “December was a rotten month for drivers as they were taken advantage of by retailers who rewrote their pump price strategy, costing motorists millions of pounds as a result. Their resistance to cutting prices and to only pass on a fraction of the savings they were making from lower wholesale costs is nothing short of scandalous. The 10p extra retailers have added to their long-term margin of 6p a litre has led to petrol car drivers paying £5m more a day than they previously would have.
“In the past when wholesale prices have dropped retailers have always done the right thing –eventually – and reduced their pump prices. This time they’ve stood strong, taking advantage of all the media talk about ‘higher energy prices’ and banked on the oil price rising again and catching up with their artificially inflated prices, which it has now done.
“The trouble is every extra penny they take as margin leads to drivers paying even more as VAT gets added on top at the end of the forecourt transaction. This means the Treasury’s coffers have been substantially boosted on the back of the retailers’ action. We urge ministers to push retailers into doing the right thing for consumers.
“The only benefit of the current high fuel prices is the extra incentive for drivers to go electric as those driving 9,000 miles a year could save around £1,500. To help drivers afford to make the switch we are offering highly competitive EV leasing deals as well as an excellent value EV home charging tariff which can be fixed until June 2023 and currently costs just 6p per kilowatt hour overnight.”
Gordon Balmer, executive director of the Petrol Retailers Association, said: "December’s pump price data is less reliable because it is taken from fuel card transactions, and there have been far fewer of these transactions because of the reduction in business activity between Christmas and New Year."
"The costs of running petrol stations rose all year, with electricity up 19%, vastly reduced margins from fuel cards, increased national insurance and wage inflation.”