The RAC is today issuing an urgent appeal to the UK’s biggest fuel retailers to do the right thing and cut fuel prices at the pumps to reflect a steady drop in wholesale costs, which began at the start of July and accelerated sharply last week.

RAC calls on retailers to cut the price of fuel by 6p per litre

With retailers having been found by the Competition and Markets Authority to have overcharged drivers by £1.6bn in 2023, the RAC believes the recent fall in the price of oil and the strengthening of the pound – the two biggest factors in determining the wholesale price of petrol and diesel – present an opportunity for retailers to regain the trust of drivers by reducing their pump prices significantly.

Data from RAC Fuel Watch shows the delivered wholesale price of petrol averaged 103p a litre last week which, with a retailer margin of 10p – 2p more than the long-term average of 8p, should lead to average prices of just under 136p including VAT, a whole 6p lower than the current UK average of 142p. Diesel, which is currently averaging 147p, should be being sold for 139p with a 10p retailer margin given the wholesale price of 106p. Further RAC analysis reveals that the UK has now had the questionable honour of having the most expensive diesel in Europe for the last 16 out of 17 weeks, and that’s even with a 5p fuel duty discount.

The average price of a litre of unleaded bought at one of the big four supermarkets, which dominate UK fuel sales, is 138p and diesel is 143p. Interestingly, their petrol is priced the same as the average price charged across the whole of Northern Ireland but diesel there is still 3p cheaper than at UK supermarkets, at an average of 139.7p.

RAC head of policy Simon Williams said: “The biggest retailers’ refusal not to reduce their prices to fairer levels is continuing to cost drivers dear, and it’s all the more outrageous when you factor in the fact we’re all meant to be benefitting from a temporary 5p cut in fuel duty, that looks likely to disappear in the coming months. While the Competition and Markets Authority has clearly stated drivers were overcharged last year, it’s blatantly apparent from our data that this problem is persisting this year.

“Once again, we urge retailers to do the right thing and reflect the lower prices they’re paying for wholesale fuel on their forecourts. It’s plain for all to see from some of the lower prices being charged around the UK, both across the whole of Northern Ireland and at various other forecourts, that fuel can and should be sold much more cheaply.

“Our analysis shows pump prices at a majority of forecourts should be cut by around 6p for both petrol and diesel. With wholesale prices down, drivers should not be seeing forecourt prices this high, especially as they are supposed to be benefitting from a 5p fuel duty cut. Our Fuel Watch data shows that this is happening as it should in Northern Ireland but, for whatever reason, it doesn’t appear to be on this side of the Irish Sea.”