According to a report by a motoring group, despite similar wholesale costs, diesel is being sold at an average of 17 pence more per litre than petrol.
The RAC found that diesel prices are currently around £1.64 per litre compared to petrol prices of £1.47 per litre, while the wholesale price for both fuels is about £1.15. The group called the difference “scandalous” and accused retailers of not passing on wholesale cost cuts to customers.
The RAC stated that diesel wholesale prices had fallen to the same level as petrol, but the price at the pump had not reflected this change. Although prices can take time to adjust due to restocking, the RAC criticized supermarkets for not reducing prices, given that they buy fuel more frequently than independent sellers.
Supermarkets, however, argued that they are doing everything they can to offer the best value for money across petrol forecourts and that the recent falls in diesel wholesale prices are still filtering through to consumers.
Following the invasion of Ukraine by Russia, fuel costs surged as global oil prices rose to over $130 a barrel. However, the prices of crude oil have now returned to pre-war levels. According to Nathan Piper, an oil and gas analyst, diesel prices in the UK have historically been higher due to the country’s need to import fuel, while petrol production is self-sufficient.
Prior to the conflict in Ukraine, the UK imported around 20% of its diesel from Russia, and the severing of ties with the country led to a global increase in demand and, in turn, higher prices.
However, there has been criticism from motoring groups, such as the RAC, that while petrol retailers raised prices quickly, they have been slow to reduce them as costs have fallen. An ongoing competition investigation is looking into whether retailers made larger profits through “rocket and feather” pricing, where fuel prices rise as wholesale costs increase, but fall more slowly than costs decrease.
The Competition and Markets Authority has reported evidence of this pricing practice, particularly with diesel prices in 2022.
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