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GENERAL NEWS
THE RAC FIGHTS FOR OUR RIGHTS
CALLING ON MAJOR RETAILERS TO CUT PETROL BY 5P A LITRE
How much? Gordon Bennett!
The RAC are trying to persuade the major fuel retailers to reduce petrol prices by 5p, in line with lower wholesale costs. The government brought in a 5p cut in duty on petrol, shortly after Russia invaded Ukraine, in order to help drivers who were struggling to pay for fuel during the cost of living crisis.
Sadly this Government cut, is in fact, mainly helping retailers who have kept their prices high to the consumer, while benefitting from the 5p off fuel duty.
The RAC would like to see the price of petrol cut by at least 5p a litre to 150p, to reflect the lower wholesale cost.
Currently oil is trading at about $90 a barrel and sterling only being worth $1.2, petrol still averaged over 113p recently, making the average price of unleaded around 155.33p. This meant that the average retailer magin was over 16p a litre before VAT!
Even diesel, which is averaging 162p across the country, is 4p over the price it should be and means that the average retailer margin is about 12p.
The RAC has analysed wholesale and retail fuel prices and is concerned that, despite the Competition and Markets Authority investigation into prices as recently as the summer, which uncovered the fact that the big four supermarkets had overcharged drivers by 6p a litre in 2022, the same thing appears to be happening again.
The RAC believes that retailers should be required to provide real-time pump prices for every site and a price monitoring body should be created to keep an eye on the situation. The Government has agreed to legislate for these requirements and a pump price watchdog may be set up, although news of when this might happen is still not clear.
RAC fuel spokesman Simon Williams said:
“Our analysis sadly shows that despite the Competition and Markets Authority’s investigation confirming drivers were being ripped off at the pumps – something we have been saying for years – and the Government acting on the findings, nothing has changed. Drivers are still losing out massively when wholesale prices come down. But in Northern Ireland where the supermarkets don’t dominate fuel retailing drivers are getting fairer deal with a litre of unleaded costing 150p and diesel 157p – 5p less than the UK average.
“Drivers and, indeed, the Treasury should be furious that the 5p-a-litre duty cut, which has been in place since the end of March 2022 is not being passed on at forecourts. There is no doubt from studying RAC Fuel Watch data that margins are up across the board, and while retailers argue their costs have increased due to inflation, the irony remains that there is a definite link between pump prices and consumer price inflation. A failure to cut pump prices to fairer levels when there is a clear opportunity to do so has the effect of keeping inflation artificially high – which is clearly in nobody’s interest.
“Our data shows the big four supermarkets’ margin on petrol has been around 14p this month compared to an average of 7p so far this year and, shockingly, this is up from just 3.4p for the whole of 2019.
“While big retailers are publishing live prices and we’ve made finding the cheapest fuel easy for every driver via the fuel finder feature in the myRAC app, this isn’t enough as what’s being charged on forecourts up and down the country is simply too high in relation to lower wholesale petrol prices.
“We badly need the Government to set up the price monitoring body recommended by the CMA and for it to carry powers to take action against big retailers that don’t reflect downward movements in the wholesale market such as we’ve been experiencing in the last six weeks.
“We have informed the Treasury that its 5p duty cut isn’t helping drivers as intended and we’re now calling on the big four supermarkets, which lead the retail market by virtue of the fact they sell around half of all the fuel bought by drivers, to explain their steadfast refusal to cut prices to fairer levels.
“Sadly, we know this is highly unlikely to happen and instead, at best, we’ll get another banal statement from the British Retail Consortium while independent retailers will feel the need to defend themselves, despite us recognising that this isn’t a problem of their making.”
“Our analysis sadly shows that despite the Competition and Markets Authority’s investigation confirming drivers were being ripped off at the pumps – something we have been saying for years – and the Government acting on the findings, nothing has changed. Drivers are still losing out massively when wholesale prices come down. But in Northern Ireland where the supermarkets don’t dominate fuel retailing drivers are getting fairer deal with a litre of unleaded costing 150p and diesel 157p – 5p less than the UK average.
“Drivers and, indeed, the Treasury should be furious that the 5p-a-litre duty cut, which has been in place since the end of March 2022 is not being passed on at forecourts. There is no doubt from studying RAC Fuel Watch data that margins are up across the board, and while retailers argue their costs have increased due to inflation, the irony remains that there is a definite link between pump prices and consumer price inflation. A failure to cut pump prices to fairer levels when there is a clear opportunity to do so has the effect of keeping inflation artificially high – which is clearly in nobody’s interest.
“Our data shows the big four supermarkets’ margin on petrol has been around 14p this month compared to an average of 7p so far this year and, shockingly, this is up from just 3.4p for the whole of 2019.
“While big retailers are publishing live prices and we’ve made finding the cheapest fuel easy for every driver via the fuel finder feature in the myRAC app, this isn’t enough as what’s being charged on forecourts up and down the country is simply too high in relation to lower wholesale petrol prices.
“We badly need the Government to set up the price monitoring body recommended by the CMA and for it to carry powers to take action against big retailers that don’t reflect downward movements in the wholesale market such as we’ve been experiencing in the last six weeks.
“We have informed the Treasury that its 5p duty cut isn’t helping drivers as intended and we’re now calling on the big four supermarkets, which lead the retail market by virtue of the fact they sell around half of all the fuel bought by drivers, to explain their steadfast refusal to cut prices to fairer levels.
“Sadly, we know this is highly unlikely to happen and instead, at best, we’ll get another banal statement from the British Retail Consortium while independent retailers will feel the need to defend themselves, despite us recognising that this isn’t a problem of their making.”
It seems such a shame that history can repeat itself so soon after the last time, but good for the RAC for staying on it, highlighting the problem and trying to get something done about it!
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