Fuel retailers failing to pass on big drop in wholesale costs, says RAC
Fuel retailers have failed to fully pass on big savings in the wholesale price of unleaded to drivers, with just a small fall in the average price of forecourt petrol and diesel in August.
Latest data from RAC Fuel Watch shows the wholesale petrol price came down dramatically by 4.38p to 96.57p a litre but the average price on forecourts only fell 0.27p to 128.88p. The situation with diesel was similar but not as pronounced – its wholesale price fell by 1p a litre to 101.12p while the average forecourt price was down by 0.38p to 131.66p.
The average price for petrol at the country’s four biggest fuel retailers – Asda, Tesco, Sainsbury’s and Morrisons – was 125.41p (a reduction of 0.55p) and 128.04p diesel (0.6p saving on July). Both fuels are around 3.5p cheaper at supermarkets than other UK fuel retailers. At the end of August Asda recorded the lowest prices for both petrol and diesel at 124.08p and 126.05p respectively.
RAC fuel spokesman Simon Williams said: “Drivers have the right to feel angry that the price of fuel did not fall more in August than it did. With nearly 4.5p coming off the wholesale price of petrol drivers should have seen, at the very least, 2p a litre being knocked off at the pumps by the end of the month.
“While the average price charged by the supermarkets came down a little more than the UK average they should really have led the way with larger cuts which would have spurred other retailers to reduce their prices too.
“By our calculations retailers ought to be charging around 126p for a litre of unleaded based on a wholesale price of 98p a litre, which many retailers will have bought at a couple of weeks ago, and then factoring in delivery, a reasonable margin of 5p a litre and VAT. As for the supermarkets they could easily be selling at around 122p.”
Williams added: “There was a time when a 4.5p reduction in the wholesale price would have led the supermarkets to cut their prices significantly, but unfortunately those days seem to have passed as they no longer appear to have the appetite for them despite the clear wholesale market dip. Perhaps they are hedging their bets thinking there could be a further drop in the value of sterling which will could cause wholesale prices to increase again.”