RAC cautions against diesel price gouging in the UK despite a decrease in wholesale costs

A leading UK motoring organization, the RAC, has accused retailers of artificially raising diesel prices at the pump, even though wholesale prices for diesel have dropped below those of petrol.

In April, diesel prices across the UK averaged 159.4p per litre, compared to 146.5p for petrol. However, at the end of the month, diesel’s wholesale prices were 104.9p per litre, significantly lower than petrol’s 111.2p. The RAC’s research indicates that fuel retailers in the UK may be exploiting consumers’ expectations of diesel prices remaining higher than petrol, even though they have now aligned with other refined fuels.

The RAC found that retailers’ average margin on diesel had surged to 22p per litre, more than triple the long-term average. Simon Williams of the RAC stated that this was difficult to justify and equally hard for diesel drivers to accept.

Diesel price hikes in 2022 exceeded the rising costs of crude oil and petrol following Russia’s full-scale invasion of Ukraine, as Russian refineries were the largest source of diesel supplies for Western Europe at the time.

The RAC’s claims come as the Competition and Markets Authority’s investigation into retail fuel costs approaches its conclusion, with findings expected by July 7. A previous report by the CMA found little evidence of issues in the retail fuel market, attributing high prices last year to the Ukraine conflict and global energy market volatility.

However, the RAC has recently highlighted the impact of supermarket fuel retailers on the broader market, as they have become less competitive on pricing. Industry insiders attribute this to increased competition from discount grocery retailers like Aldi and Lidl.

Private equity-backed buyouts of Asda and Morrisons in recent years have also left them with substantial loans to repay, further affecting their pricing strategies. Tesco, Sainsbury’s, Asda, and Morrisons did not comment on the matter.

Gordon Balmer, executive director of the Petrol Retailers Association, representing independent fuel stations, noted that supermarkets account for about 45% of all petrol and diesel sales in the UK. He added that the pricing dynamics in the market are now shifting.

Linking Shareholders and Executives :Share Talk

If anyone reads this article found it useful, helpful? Then please subscribe www.share-talk.com or follow SHARE TALK on our Twitter page for future updates. Terms of Website Use All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned

Weekly Newsletter

Sign up to receive exclusive stock market content in your inbox, once a week.

We don’t spam! Read our privacy policy for more info.