Major retailers failing to cut fuel prices
The RAC says we could be paying up to £9 more than we should be to fill up
Last updated 3rd Aug 2022
The RAC says big retailers are failing to reduce petrol prices in line with falling wholesale costs.
It says the wholesale cost of unleaded - the price when it arrives at forecourts - is now back down to its early May price of 131.75p per litre, which saw average pump prices of around 167p per litre.
But the motoring organisation says drivers are currently paying an average of 183p per litre at pumps across the UK, despite the drop in wholesale costs.
It comes after fuel prices hit their highest-ever levels earlier this Summer, as the UK's cost-of-living crisis began to kick in.
The RAC says the wholesale cost of petrol has fallen by 20p since early June.
Yet UK retailers continued to increase their prices in June and only dropped their pump prices by an average of 9p during July, the firm said.
This means drivers filling up at the end of July average of 183p per litre could be paying almost £9 a tank more than they should be.
Equally, the firm said drivers should now be paying about 182p per litre for diesel - nearly £6 a tank lower than the end of July average of 192p per litre.
The "big four" supermarkets - Tesco, Asda, Morrisons and Sainsbury's, along with several other suppliers - have been facing criticism for failing to reduce their prices in line with falling wholesale costs.
The RAC said that while several reduced their prices last week, the cuts are not enough to be in line with the wholesale cost.
RAC fuel spokesman, Simon Williams, said: "July has been an unnecessarily tough month for drivers due to the big four supermarkets' unwillingness to cut their prices to a more a reasonable level, reflecting the consistent and significant reductions in the wholesale cost of petrol and diesel.
"As it was, we saw independent retailers leading the charge with fairer pump prices appearing all around the country which eventually forced the supermarkets to finally implement a more substantial cut late last Friday afternoon.
"What ought to have happened is that the biggest retailers cut their prices more significantly on a daily basis, given the wholesale price of petrol has fallen steadily over the last eight weeks."
Mr Williams advised drivers that they should no longer assume supermarkets are the cheapest places to get fuel.
He said motorists should "shop around as it's highly likely you'll find an independent retailer which is doing the right thing and fairly reflecting their lower wholesale costs by charging a lower price".
He added: "This is really encouraging because the independents buy new stock less frequently than the supermarkets as they don't sell as much, and consequently aren't as well positioned as their rivals to be able to snap up fuel at lower prices when there are sudden market drops."
A spokesperson for Sainsbury's said: "We are committed to offering motorists great value and over the weekend we lowered the price of petrol and diesel across our forecourts. We price locally and competitively."
The PA news agency has contacted Tesco, Asda and Morrisons for comment.
Here's how the cost of living crisis is affecting us:
Interest rates and inflation go up
Inflation rose by 8.8% in the 12 months to January 2023, down from 9.2% in December 2022. With interest rates also rising to 4%, those saving money will earn more interest on their finances, whilst those paying mortgages would pay more interest to the bank.
Energy bills
The price of energy went up incredibly as the cost of living crisis hit, with the gas price spike caused largely by the war in Ukraine. The price cap - which is set by an independent regulator to help offset costs onto customers - was set to rise to £3,549 for an average home in October but a price freeze from the government restricted the typical bill to £2,500. That's still an increase of 27% from the previous energy cap and as it's a cap on unit cost, the more energy you use the higher your bill will be.
Food prices
The cost of a weekly shop also has gone up as a result of the cost of living crisis. As a result of the war in Ukraine, a number of products including cooking oils and wheat have been disrupted. This means that several products are now considerably more expensive, driving bills up for customers.
Prices at the pumps
The average cost of petrol has also rose to unprecedented levels. Supply lines for petrol have been thrown into doubt as a result of the war in Ukraine, as Russia is a large export partner for gas, oil and fuel. In April 2022, the average price for a litre of petrol on the forecourt was 160.2p, whilst a litre of diesel would cost 170.5p. By late June 2022 the price had risen to an average of 190.9p for a litre of unleaded and 198.9p for a litre of diesel. In March 2023 the price wass on average of 147.03 in petrol and 167.04 in diesel.
Average cost of filling up a car with petrol hits £100
On 9th June 2022, the average cost of filling up a car with petrol hit £100 for the first time ever. Diesel had already hit that milestone. It comes as the cost of fuel hit a record high of one pound eighty a litre. The 2p rise was the biggest daily jump in 17 years. Prices have dropped by at least 20p per litre since the high point.
Hear all the latest news from across the UK on the hour, every hour, on Greatest Hits Radio on DAB, smartspeaker, at greatesthitsradio.co.uk, and on the Rayo app.