The price of petrol and diesel remains artificially high as retailers are refusing to pass on cheaper wholesale costs to motorists quickly enough, fresh analysis has revealed.
Retailers are accused of pocketing profits at drivers’ expense, with the AA claiming ‘old habits die hard in the fuel trade’ as they persist with lowering pump prices far slower than they should.
This is despite a recent investigation by the competition watchdog finding evidence of the industry’s ‘rocket and feather’ pricing tactics.
The motoring group says that petrol has fallen by just 1p per litre since the start of October, despite an 8p drop in wholesale prices during the same period.
Fuel retailers still not playing fair with drivers: The AA says petrol has fallen by just 1p per litre since the start of October, despite an 8p drop in wholesale prices during the same period
A 10-week rise in forecourt fuel prices triggered in the summer eventually ended at the start of October as wholesale costs went into reverse.
But the full extent of these lower wholesale prices are still not being reflected at the pumps.
This is despite the Consumer Markets Authority’s high-profile probe into the fuel sector, which ruled that retailers had quickly increased pump prices when wholesale costs rose but were slack to cut them when they dipped.
The AA says that, on Tuesday, petrol at the pump averaged 156.05p a litre with diesel at 162.37p a litre.
A month ago, pump averages stood at 155.50p and 158.95p a litre respectively (17 September), the AA says.
The late summer surge saw petrol rise from a low of 143.22p a litre on 19 July to a peak of 157.12p on 1 October. Meanwhile, diesel soared from a low of 144.31p on 18 July to a peak of 163.76p on 7 October.
The AA says fuel retailers are continuing with ‘rocket and feather’ pricing, despite the recent competition watchdog’s investigation into why the sector wasn’t slashing forecourt prices in line with falling wholesale costs
This inflated the cost of a tank of petrol by £7.65 (£78.77 versus £86.42). Refuelling a van with an 80-litre tank rose from £115.45 to £131.01.
It pointed out a ‘striking’ difference in supermarket pricing, though said because pump prices were at a ‘turning point’ some lower costs were still likely feeding through to forecourts.
Luke Bosdet, the AA’s fuel spokesman, said: ‘Two features stand out: the fuel trade has been slower in passing on lower costs than it was hiking prices in July, and petrol wholesale costs have not tracked recent oil price increases and are still well down on September highs.
‘This makes any failure to bring down petrol pump prices soon a further bad reflection on the fuel trade.’
However, the Petrol Retailers Association has refuted the AA’s claims, saying it had overlooked multiple fluctuations, including volatile exchange rates.
Gordon Balmer, executive director of the PRA, said: ‘Cuts to Saudi Arabian crude oil production and increasing instability in the Middle East are putting pressure on fuel prices.
‘Additionally, the industry has had to adapt to rising labour costs, increased energy expenses, an increase in forecourt crime and stubbornly high inflation rates. Retailers are operating on razor thin margins to ensure that motorists are offered the best deal possible.
‘As the AA acknowledges, many independent forecourts are actively undercutting supermarkets, highlighting the dynamic nature of the market.
‘As always, I would advise motorists to shop around for the best prices.’
