Diesel Drivers 'Taken For A Ride' At The Pump

A motoring organisation has claimed that diesel drivers are being "taken for a ride" by fuel retailers.

The RAC said it was calling for a cut of 4p-per-litre at the pumps because of a lack of parity between the wholesale cost and what motorists are having to pay.

It said the wholesale price of diesel was 1p a litre more than for petrol, yet diesel was nearly 6p more than petrol at forecourts.

The RAC highlighted recent Government figures which showed total fuel sales were up 3.5% in February compared with the same month last year.

Diesel sales last month, at 2.42 billion litres, represented the fifth highest monthly total since 1990 and were 4.5% up on February last year.

Petrol sales were up 2% last month but this was the eighth lowest total since 1990, the organisation said.

RAC (Taiwan OTC: 2237.TWO - news) fuel spokesman Simon Williams said: "It's hard not to think that business is being taken for a ride by the fuel retailers.

"Traditionally, business runs on diesel, and with sales of diesel at an all-time high the retailers have maintained a higher margin on diesel, perhaps to subsidise petrol sales".

Pump prices have been marching upwards in recent weeks as oil costs - which lost up to 60% of their value - started to recover some of those losses again.

Brent crude is currently trading around $55-per-barrel having dropped to around $40 earlier this year as a glut of oil on the market combined with world economic weaknesses to drive costs down.

The latest figures from Experian Catalist showed average forecourt diesel prices stood at 118.31p-per-litre on 22 March while unleaded cost 112p.

Diesel hit five-year lows of 115p in January while petrol costs tumbled below 110p.

Brian Madderson, Chairman of the Petrol Retailers Association, responded to the RAC report by saying it failed to acknowledge the increasing impact of fuel cards - used by many businesses especially to save on bills.

He said: "Transactions made on fuel cards in the UK will mainly be diesel due to the tax incentives.

"The total UK fuel card market is now worth over 8 billion litres per annum".

Commenting on the wider market he added: "Currently the margin available on petrol is extremely low - and so higher margins may be taken on diesel after adjusting for the severe margin depressing effect of fuel cards to the independent retailer sector".