Average petrol and diesel pump prices fell again in December, but ‘the big four supermarkets’ are still taking unfair profit margins, according to the RAC.

The RAC data says unleaded should be on sale for an average of 137p, instead of 140.6p as it is currently

Its data reveals a 6p-a-litre drop in the average price of petrol across the UK to under 147p (146.69p), making for two consecutive monthly falls. A full 55-litre tank of petrol now costs £77.32, down £3.40 in the month

Diesel pump prices also fell, down by 5p to 149.18p, saving almost £3 (£2.86) on a fill-up (£82.05).

Unleaded is now back to a price last seen in early February 2022 – prior to Russia’s invasion of Ukraine which led to the cost of oil rocketing to around $130. The price of a barrel is now under $80.

But the RAC says prices on the nation’s forecourts would be lower still if the main supermarkets were taking “fairer, smaller margins”.

Its FuelWatch data reveals that in December the average supermarket margin on a litre of fuel was 13p – more than double the amount taken in 2021. And the fuel finder feature in the free myRAC app shows the scope for cuts – an independently run forecourt in Shropshire is significantly undercutting supermarket pump prices by around 6p a litre.

The RAC continues to call on the supermarkets to match prices seen in Northern Ireland – where petrol is 5p cheaper than the UK average at just 135.28p and diesel is 5p less at 144.2p. Both fuels bought in Northern Ireland are also cheaper than the averages charged at the big four supermarkets – 137.63p for petrol and 145.89p for diesel.

RAC fuel spokesman Simon Williams said: “It’s surely impossible to argue that competition is working properly if prices are so vastly different in two parts of the UK. And if an independent retailer in the middle of Shropshire can be undercutting the supermarkets by around 6p a litre, something has to be very badly wrong.

“We continue to call on the biggest retailers to play fair with drivers and lower their prices to match what’s being charged in Northern Ireland.”

Williams also urged Energy Security Secretary Claire Coutinho to take further action on supermarket fuel prices, after she cautioned retailers that they will be held to account if there is any evidence of rip-off prices. This follows the Competition and Markets Authority’s investigation concluding drivers were overcharged to the tune of £900m in 2022.

RAC data indicates just how far fuel prices should be cut. It says that with the current 104p delivered wholesale price of petrol and even a margin of 10p a litre – 3p higher than the long-term margin of 7p – unleaded should be on sale for an average of 137p, instead of 140.6p as it is currently.

The RAC estimates that the supermarkets could easily be charging around 132p, not their current 137.63p.

Simon Williams added: “In spite of the current overcharging, we strongly hope that 2024 will be the year when drivers finally get to see fairer pump prices.”

Regional pump prices