Drivers overcharged £5 each time they fill up at the pumps, says RAC

Fuel retailers continue to fleece motorists, with drivers paying around £5 more than they should be each time they fill up at the pumps, a new report says.

The RAC has calculated that Britain’s car owners were overcharged by a cumulative £184million in the last two months as major retailers failed to pass on lower wholesale costs, and the Government’s March 5p fuel duty cut, in a bid to make money.

This is despite a recent investigation by the Competition and Markets Authority (CMA) that fuel margins had ballooned last year, and the Government’s push to make it law for operators to share daily price information so motorists can shop around for deals.

Price hike: The RAC says that drivers are paying 10p-a-litre more for petrol than they should

The RAC’s latest Fuel Watch report found that the average price of petrol fell by 7.5p a litre in November to 146.95p.

However, when comparing against wholesale costs throughout the month it worked out that drivers paid around 10p more than they should for each litre.

Diesel also came down by almost 7p a litre to 154.40p in November, though the RAC calculates that this is still around 5p-a-litre more than it should be based on wholesale costs.

The motoring group’s analysis shows that average retailer’s profit margin on petrol is now 17p a litre and 13p for diesel. 

The long-term averages are 7p for petrol and 8p for diesel.

This news comes as drivers are still supposed to be benefitting from a 5p-a-litre duty cut implemented in March 2022. 

Instead, the figures show it is major retailers who are gaining from this. 

The RAC believes petrol should be sold for an average of 137p and diesel for 150p, based on retailers taking a fairer margin. 

This means drivers are currently paying around £5 more than they should be to fill up an average 55-litre family car (£80.62 versus £75.35). For diesel, the figure is around £2.50 (£84.92 versus £82.50).

RAC fuel spokesman Simon Williams said: ‘While the price of fuel fell in November, the truth is there is no reason whatsoever for drivers to be jubilant as the data clearly shows they are continuing to get a rough deal at the pumps, unless they live in Northern Ireland [where prices are much lower]. 

‘Wholesale fuel costs have been falling for months, so they should be paying around 137p for petrol, instead of a whopping 147p. Diesel is also overpriced at 154.40p when it should be on sale for under 150p.

‘This is extremely worrying as the biggest retailers don’t seem to have heeded the warnings levelled at them by Energy Secretary Claire Coutinho at the end of October saying she wouldn’t hesitate to call out those that rip off the public.’

Williams welcomed the Government’s intervention but describes it as being a ‘case of far too little, far too late’, saying ministers should already have a fuel price monitoring body as suggested by the CMA.

He added: ‘The wholesale market data the RAC analyses shows the true picture and unfortunately, for the Government and drivers, it shows the 5p-a-litre duty cut is not getting to drivers at all, and prices aren’t falling nearly fast enough yet again.

‘If a price monitoring body had already been set up by now – as recommended by the CMA and accepted by the Government – then this might have been prevented and people might finally be getting a fairer deal at the pumps.

‘We reiterate our call to the biggest retailers to significantly cut their prices to mirror what’s happening with greatly reduced wholesale costs.’

Boss at the Petrol Retailers Association, Gordon Balmer, hit back at the RAC’s report, saying it failed to acknowledge ‘cost pressures independent filling stations face’ in the current climate

Responding to the RAC’s new report, Gordon Balmer, executive director of the Petrol Retailers Association (PRA) – which represents independent fuel retailers up and down the country – said: ‘We have been working closely with both the CMA and the Department of Energy Security and Net Zero as they develop their fuel price transparency scheme. 

‘Amidst a cost-of-living crisis, the PRA is doing all it can to ensure that motorists have access to the best information possible.’

Balmer went on to say that he was ‘disappointed’ that the association is being ‘forced to constantly correct the record’ around its members overcharging drivers, adding: ‘I have extended yet another invitation to the RAC to offer a comprehensive understanding of the cost pressures our members face. Our independent retailers operate in a dynamic market, consistently striving to provide fair and competitive prices to consumers.

‘Our members are small businesses that have worked hard to keep their communities fuelled and fed. Retailers operate on razor-thin margins to stay competitive, despite having to content with the recent increases in fixed costs.

‘The PRA has offered its full support and cooperation to the CMA as it develops its fuel price transparency scheme to help motorists find the best deals available to them.’

This post first appeared on Dailymail.co.uk