Average petrol prices in the UK are around 16p a litre higher than they should be, due to the big four supermarkets not passing on wholesale cost reductions.

The RAC is urging drivers to rethink where they refuel their cars and shop around as independent retailers may well be cheaper now

That’s according to the RAC, which is urging drivers to rethink where they refuel their cars and shop around as independent retailers may well be cheaper now.

Its analysis reveals that while independent forecourts have led the way on fairer fuel prices, major retailers should be cutting pump prices much further.

While the average price of unleaded fell in July by nearly 9p (8.74p) to 182.69p a litre, the RAC says it should currently be around 167p a litre after the wholesale cost fell back to its early May price. This means petrol drivers are paying nearly £9 a tank more than they should be. And diesel should be closer to 182p – nearly £6 a tank lower than the end of July average.

The high wholesale prices of late May and June caused average petrol prices to rocket by 29p (28.66p) a litre in two months to a new record high of 191.53p on 3 July and diesel to climb 22p (21.66p) to an all-time high of 199.09p on 25 June.

But since then, the wholesale cost of petrol delivered to forecourts has fallen; in the last eight consecutive weeks, it’s gone down by a whopping 20p, from 151.93p at the start of June to 131.75p a litre in the last week of July. The last time unleaded was this price on the wholesale market was in early May which a week later led to a UK average pump price of just 167p a litre.

But despite this 20p fall in wholesale petrol prices, the average price paid for unleaded by drivers across the UK has only dropped by 9p – all of which came off in July. This is far too slow even after factoring in the two weeks it generally takes for the smallest retailers to use up their existing fuel and buy more supply at a new – in this case – lower price.

RAC fuel spokesman Simon Williams said July had been an unnecessarily tough month for drivers “due to the big four supermarkets’ unwillingness to cut their prices to a more a reasonable level, reflecting the consistent and significant reductions in the wholesale cost of petrol and diesel”.

He added: “The best advice for filling up is no longer to assume the supermarkets are the cheapest, but to shop around as it’s highly likely you’ll find an independent retailer which is doing the right thing and fairly reflecting their lower wholesale costs by charging a lower price. This is really encouraging because the independents buy new stock less frequently than the supermarkets as they don’t sell as much, and consequently aren’t as well positioned as their rivals to be able to snap up fuel at lower prices when there are sudden market drops.”

Regional pump prices compared

Unleaded

Diesel