Fuel prices still 11p per litre too high, despite £5 drop in cost of fill-up
‘Something very wrong’ with UK fuel retailing as wholesale savings still not being passed on
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Fuel prices fell by almost 9p per litre in December, knocking £5 off the cost of a full tank, according to new data.
Average petrol prices fell to 151.06p per litre while diesel dropped to 173.97p. The reduction follows a 6p per litre fall in November but experts say drivers are still being overcharged at the pumps by retailers who are making larger-than-usual profits.
The average drop around the UK was 8.4p for unleaded and 9.4p for diesel but the major supermarket chains brought their prices down by 10p and 11p respectively. Despite this, the RAC claims the big four chains are still overcharging drivers.
RAC fuel spokesman Simon Williams said: “On the face of it, December looks like it was a good month for drivers with 9p coming off at the pumps on top of November’s 6p, but there’s no question that the drop should have been far bigger given how far wholesale prices have come down.”
Wholesale prices remained stable in December after falling sharply in previous months but Williams said that failure to pass on these previous reductions as they occurred meant retailers were still enjoying high profits at the expense of drivers.
He said: “For weeks we’ve been calling on the big four supermarkets to cut their prices more substantially to give drivers a fairer deal when they fill up, so even though they have reduced their prices collectively by more than 10p a litre in December, they are still nowhere near where they should be given the scale of the drop in wholesale prices.”
Based on current wholesale prices and allowing for a 10p-a-litre retailer margin – 3p more than the long-term average – the RAC believes petrol should be around 140p per litre and diesel should be 160p a litre. It pointed to members-only retailer Costo, which is currently charging an average of just 137.3p for unleaded and 158.4p for diesel, as an example of what retailers could offer.
Williams also highlighted prices in Northern Ireland compared with the rest of the UK, claiming something is “very wrong” with fuel retailing in mainland Britain.
He commented: “Looking at prices in Northern Ireland is a good reference for what should be happening across the rest of the UK as petrol was 4.5p cheaper there than the UK average at the start of December but was nearly 7p lower at the end of the month. For diesel the difference is even more pronounced as a litre was 7p cheaper at the beginning of December and 9.5p less by the close.
“If fuel can be sold this cheaply in Northern Ireland, then this must mean something is very wrong with fuel retailing in mainland UK.”
Northern Ireland was the cheapest area of the UK for both petrol and diesel in December, with average prices of 144.43p and 164.55p respectively.