Petrol prices fall to 18-month low as supermarkets come under fire over profit margins

Average petrol prices have fallen below 145p per litre for the first time in 18 months, according to the latest data.

The price of unleaded is now at its lowest point since November 2021 while diesel has also fallen below 155p for the first time since February 2022, just before the Russian invasion of Ukraine set oil and fuel prices spiralling.

The latest reductions mean both fuels have dropped by more than £25 a tank since hitting record highs in mid-2022. Petrol has fallen 47p a litre since peaking at 191.5p in early July, while diesel has dropped 45p from its all-time high of 199.09p in late June.

Despite the latest drop, the RAC says that drivers should expect further savings, even in the face of retailers enjoying larger-than normal profit margins. 

RAC fuel spokesman Simon Williams said: “Seeing the price of unleaded fall back under 145p a litre for the first time in 18 months is good news for the country’s 19 million petrol car drivers. This means it’s now nearly £26 cheaper to fill up a family-sized petrol car this summer compared to last year when a litre hit the record price of 191.5p.

“While it’s good news diesel has also dropped below 155p a litre for this first time since the end of February last year, drivers of the UK’s 12m diesel cars and countless businesses who rely it to fuel their vehicles, should be paying 20p a litre less as its wholesale price is now 4p lower than petrol’s. 

“This is being demonstrated very powerfully by one independent retailer in Shropshire who is currently charging 131.9p – more than 22p below the UK average. We hope this finally embarrasses the country’s biggest retailers to cut their pump prices significantly.”

The new figures come as the Competition and Markets Authority (CMA) said it believed weak competition between retailers was keeping prices higher than necessary.

In an update on its Road Fuel market study, the watchdog said that part of the blame for higher fuel prices in recent months was down to the behaviour of retailers and, in particular, supermarkets. It highlighted that profit margins at the UK’s “big four” chains had grown significantly in recent years and said that if margins had remained at 2019 levels petrol and diesel would be around 5p per litre cheaper now. 

The CMA’s chief executive, Sarah Cardell, said: “We have found evidence that suggests weakening retail competition is contributing to higher prices for drivers at the pumps. We are also concerned about the sustained higher margins on diesel compared to petrol we have seen this year.”

Williams added that based on the current wholesale prices, with petrol and diesel at 110p and 105p respectively, drivers should be paying no more than 142p and 137p per litre, including an above-average 10p-a-litre retailer margin.