Drivers are being denied a further 10p a liter cut in the price of petrol as large retailers increase their profit margins, according to the RAC.
The average price of a liter of unleaded in the UK fell nearly 7p to 162.9p last month as wholesale oil and fuel prices fell, he said.
It was the sixth-biggest monthly drop in average petrol prices since 2000, but the drop should have been much bigger, the car group said, with major fuel retailers pocketing extra prices by not passing on savings on hardened motorists.
Drivers are being denied another 10p cut in petrol prices as big retailers boost profit margins, says RAC
To fill a mid-size petrol family car with a 55-litre tank in September, it fell below £90 for the first time in four months.
This means that since unleaded prices hit a record high in the UK on July 3 of 191.53p, almost 29p (28.64p) have come off a litre, a saving of £15.75 per tank, calculated the RAC.
There has not been the same level of lower fuel costs for diesel owners, however.
A liter reduced in September but only by 3.5 pence, ending the month at 180.16 pence.
Although this is 19 pence cheaper than its peak price of 199.09 pence recorded on June 25, it is more than 17 pence more expensive than unleaded.
The cost of filling a 55-litre fuel tank with diesel dropped last month from £10.41 to a fraction under £100 (£99.09) – something drivers haven’t seen since the end of May.
RAC fuel spokesman Simon Williams said drivers had been shortchanged by major fuel retailers and should have seen a “much bigger drop” in prices at the pump as the wholesale price of fuel petrol delivered was around 120p for the whole month.
‘This means forecourts across the country should have been showing prices of around 152p given that the long term margin on unleaded is 7p a litre,’ he said.
Why is diesel so much more expensive than gasoline right now?
Drivers of diesel cars pay the highest premium over petrol, with the difference between the price of a liter of unleaded and diesel over 17p.
This means that filling the tank of a diesel family car costs around £9 more than an equivalent petrol.
The price difference is the largest seen in records dating back to June 2003, with diesel costing on average only around 5p per liter more than petrol since.
The price chasm is mainly due to an increase in the amount of diesel used for heating and power generation in mainland Europe, as Russia has reduced its gas exports.
Steve Gooding, director of the RAC Foundation, explains: “In part, the huge discrepancy is the product of a drop in global demand for gasoline after the end of the so-called driving season in the United States.
“But more significant is the growing global demand for diesel which is not only used as a road fuel but also, particularly in continental Europe, as a method of heating and power generation and as a substitute for gas.
“Given that supplies from Russia have been cut due to the war in Ukraine, that means a lot of people are looking for less stock.
“The bad news for UK diesel drivers – and the UK freight industry dependent on diesel trucks – is that, with winter just beginning and the war in Ukraine showing no sign of ending, the wide gap between diesel and gasoline prices at the pump are likely. continue for several months even if the price of oil drops.
Typically, the RAC says retailers reap profits of around 7p per liter on average.
However, the margins seen in September are much higher than that.
“RAC Fuel Watch data showed margins were around 17p per liter – a whopping 10p more than normal,” added Williams.
The Petrol Retailers Association, which represents independent petrol stations across the UK, said petrol stations have been forced to keep their fuel prices higher to cover higher operating costs.
“To stay in business, fuel retailers have faced increased operating costs driven by a 40 year high rate of inflation and these need to be covered hence the need to increase margins on fuel. An example is the tripling of energy costs for businesses because there was no price cap,” explained Gordon Balmer, executive director of the PRA.
“We welcome the government’s recently announced support for business energy bills, but this is only for six months.
‘The PRA has lobbied the Government to express the need for support beyond six months as forecourts are crucial to keeping the UK economy functioning.’
Howard Cox, founder of the FairFuelUK campaign, responded to the RAC report by criticizing the Chancellor for failing to introduce new fuel tax cuts to help struggling motorists who are being stung by ‘opportunistic profiteers in the supply chain. ‘fuel supply’.
He said: ‘At FairFuelUK we estimate that between 10 and 20p-a-litre of gross scrap was not passed on to drivers.
“Not only did Kwasi Kwarteng fail to scrap the fuel tax in his mini-budget which would have pleased the world’s highest taxed drivers, reduced inflation, increased GDP and eased the cost of living crisis, as previous chancellors, it allows the fuel supply chain to continue to exploit pilots.
“It is high time and indeed truly immortal that an independent PumpWatch body was not introduced, to protect 37 million drivers from this perpetual profit.”
The RAC’s September Fuel Watch report shows drivers in the East Midlands saw the slowest decline in petrol prices during the month, falling just 5.93p per litre. This compares to the biggest drop of 7.91 pa-litre in London, with the capital now cheaper to fill up with unleaded than the East Midlands region.
At the end of last month, drivers in the East Midlands were paying more for petrol than motorists in London
Supermarkets are not always the cheapest option
Supermarkets are also not helping the cause of drivers, the RAC said.
Normally the big four – Asda, Morrisons, Sainsbury’s and Tesco – charge around 3.5p per liter less than the UK average. However, the current difference is only about 1.5 pence cheaper.
“While there are no rules on what retailers can charge for their fuel, the fact remains that supermarkets are hugely influential in determining average UK pump prices because they sell so much fuel,” Mr Williams said.
‘However, as many drivers will have noticed, there are many small forecourts which now sell much cheaper fuel than supermarkets.
“We urge everyone to seek out the best deals rather than just assuming supermarkets are the lowest because they have been in the past.”
Morrisons is currently running a 5p a liter promotion for customers who spend £40 in-store.
“This type of promotion is usually only seen when supermarkets benefit from lower wholesale prices. offering discounted fuel to customers who spend a certain amount in-store,” Williams said.
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