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Petrol stations ‘must be investigated’ as drivers fund huge profits

Person using a petrol pump - Lewis Whyld/PA
Person using a petrol pump - Lewis Whyld/PA

The Government must investigate retailers overcharging motorists, campaigners have said, with profit margins on petrol now three times higher than the average.

Wholesale oil prices fell last week amid news of the omicron Covid variant but costs at the pump have not dropped. A tank of petrol is £7.20 more expensive than it should be, data from the RAC showed.

Forecourts are earning a 19p per litre margin on petrol and 15p on diesel following the oil price crash, according to the RAC, which tracks consumer prices. This is three times the usual margin on petrol and two and a half times the usual margin on diesel, it said.

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The RAC's Simon Williams added: "Retailers must cut the cost of fuel or they will lose all credibility. If nothing happens in the next few days, we will be talking to the Government and demanding an inquiry.

"Drivers are in dire need of some respite and now it’s impossible to blame the prices on rising oil costs. It seems as though retailers think they can get away with charging more because of the public’s general acceptance of rising energy prices."

Mr Williams said that before the drop in wholesale prices, retailers were making a 9p per litre margin, some 3p more than the long-term average. Unleaded is currently 148p a litre on average, super unleaded 160p a litre, and diesel 151p, RAC said.

Petrol prices reached record highs last month after the price of crude oil hit $85 a barrel. It fell to $73.18 on Friday.

Gordon Balmer, of the Petrol Retailers Association, which represents around two thirds of forecourts, said: "[Our] members mostly buy fuel from their fuel supplier on a weekly lagged basis. Therefore, if they need to order deliveries for this week then they are charged at the average of last week’s product price values.

"In addition to this, they have been hit by the ‘double whammy’ of reduced sales and rising costs. Members continually monitor prices daily to ensure that they remain competitive with their industry counterparts and continue to provide good value for money.”

Supermarket prices have tended to be lower than other retailers but have reached near-parity. The South East has the highest fuel prices while Northern Ireland has the lowest, according to AA.

Last month the Government scrapped a planned rise to fuel duty that it claimed would have cost drivers an extra £15 every time they filled up.