According to the RAC, petrol prices should be 6p per litre lower than drivers currently pay at the pump.
The roadside assistance company is urging forecourts to reduce their prices to align with the falling wholesale costs of crude oil, which have been declining since early July. The RAC believes that the recent drop in oil prices and the strengthening of the pound—key factors in determining the wholesale price of petrol and diesel—are not being reflected in current fuel prices.
The average price of petrol in the UK is 142p per litre. However, RAC Fuel Watch data indicates that the wholesale price of petrol averaged 103p per litre last week. Considering a retailer margin of 10p—2p above the long-term average of 8p, this should translate to average petrol prices of just under 136p per litre, including VAT.
Similarly, diesel prices should be around 139p per litre instead of the current average of 147p.
RAC analysis also highlights that the UK has had the most expensive diesel in Europe for 16 of the last 17 weeks, even with a 5p fuel duty discount.
Simon Williams, RAC head of policy, stated: “The refusal of major retailers to lower their prices to fairer levels is costing drivers significantly. This is especially outrageous given the temporary 5p cut in fuel duty, which may soon be removed.
“Despite the Competition and Markets Authority’s findings that drivers were overcharged last year, our data shows this issue continues. If prices do not decrease substantially in the near future, we believe the government and the CMA should convene with major retailers to demand explanations. Immediate action is necessary to address this problem, as drivers are suffering with every fill-up.
“High pump prices also contribute to increased inflation. Lower fuel prices would help reduce inflation, benefiting borrowers and the broader economy.”
