UK Markets closed

Drivers ‘overcharged’ as supermarkets fail to lower petrol prices

A car is filled with petrol at a filling station, in Knutsford, Cheshire, Britain, March 10, 2022. REUTERS/Carl Recine
The RAC says petrol should be 14p lower than current average of 159.88p. Photo: Carl Recine/Reuters

UK motorists are being “overcharged” despite the average 6p a litre fall in fuel as forecourts should have cut prices “at least twice that” amid plunging wholesale prices of petrol, according to the RAC.

Unleaded came down from 165.96p to 159.88p while diesel dropped from 190.31p to 183.87p, saving motorists more than £3 a tank.

It now costs £91.28 to fill up 55-litre family-sized petrol car and £101.13 for a similar diesel vehicle, according to the RAC.

Wholesale petrol has fallen by 11p and diesel by 15p but that drop hasn’t found its way to drivers when it’s time to fill the tank.

Read more: Car insurance cost rises 2% to £436 on average

The RAC accused supermarkets of clinging on to excessive margins of more than 20p a litre.

“It’s bordering on a scandal that drivers are being overcharged so much because the big four supermarkets, which dominate UK fuel retailing, are flatly refusing to reduce their prices by bigger amounts. Their prices are dropping like a feather when they should be falling like a stone,” RAC fuel spokesman Simon Williams said.

A litre of unleaded bought at a supermarket costs 158.31p — down 6p in the month — but now only 1.6p lower than the UK average.

Taking an average of wholesale prices for 21-25 November, the RAC said petrol should be at an average of 146p and diesel to 169p — 14p and 15p lower than the current averages.

Supermarket diesel at the end of November was down 3.7p to 182.74p, only a penny below the average price across the country. Long-term RAC data shows that both fuels are normally 3.5p cheaper when bought at a supermarket.

Read more: UK's top selling cars: Hatchbacks remain firm favourites

“In 10 years of closely monitoring fuel prices we have never seen major retailer margins this high for this long. It used to be the case before the pandemic that we’d see wholesale prices drop by 4p a litre and then the supermarkets would be vying with one another to announce a price cut to drive customers into their stores,” Williams added.

“This sadly seems to be a thing of the past as nowadays they appear to be hanging on to massive margins for dear life. This is to the detriment of everyone because, of course, other retailers won’t be encouraged to reduce their prices meaning the UK average stays artificially high.”

Watch: Brent Above $100 a barrel by 2H of 2023: Beveridge