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Supermarkets failing to pass on lower petrol prices, RAC finds

An E10 petrol pump at a Petrol Station in Kettering. A cleaner form of petrol is being introduced at filling stations across Britain from Wednesday. E10 petrol, which is made with up to 10% bioethanol - a type of renewable fuel - will be the standard offering at forecourts as part of Government plans to cut carbon emissions. Picture date: Wednesday September 1, 2021.
Average price of petrol should be 10p cheaper per litre. Photo: PA (PA)

Supermarkets and several other retailers are failing to reduce petrol prices in line with falling wholesale costs, the RAC has warned.

The average price of a litre of unleaded is now under 170p at 169.8p for the first time since May but the motoring group said petrol prices should actually be around the 161p mark.

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“Allowing for a generous 10p a litre margin, we should be seeing the petrol sold for around 161p a litre. Some big supermarket sites aren’t too far off charging this — but there’s a real postcode lottery out there with prices varying wildly depending on where a driver is in the country,” RAC spokesperson Rod Dennis said.


The average price of petrol last month dropped a further 12.31p, the largest monthly drop on record.

“Drivers must shop around for the best deal they can, and we applaud those independent retailers who are doing their best to charge a fairer price for fuel and support their local communities through this incredibly expensive time,” he added.

The biggest supermarkets were charging just 1.62p below the average price of petrol last month, which stood at 168.18p, compared to the typical 3p.

Supermarkets in some parts of the country appear to be charging much less for the same fuel than in other areas, research by RAC showed.

Drivers of diesel vehicles saw 8.35p coming off the average price of a litre with the pump price ending August at 183.71p, a price the RAC said is “a fairer reflection” of wholesale prices.

This means it now costs £4.59 less to fill a 55-litre car than it did a month ago, with costs down from £105.63 to £101.04.

Read more: Cost of living: 10 ways to improve your car's fuel efficiency

Analysis by the RAC in August also revealed that the UK is one of the least generous countries when it comes to supporting drivers with high petrol and diesel prices.

For example, the French government increased its discount on fuel to 30 cents from 15 cents on 1 September, which will result in pump prices under the equivalent of £1.50 a litre across the country.

Watch: Tesco, Asda, Morrisons and Sainsbury's are failing to reduce petrol prices