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Diesel drivers ‘subsidise’ petrol cars as profit margins double to 20p

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Diesel drivers are “effectively subsidising” petrol prices as retailers double their margins to 20p on every litre sold. This “huge premium” fails to reflect the lower wholesale costs, according to a motoring group.

The country’s 12 million diesel drivers are paying 20p more than petrol motorists, despite wholesale prices being little different between the two fuels.

According to the RAC Fuel Watch, the wholesale price of diesel was just 6p more than petrol last week, standing at 121.06p compared to 115.48p.

However, diesel drivers are paying 168p a litre at the pumps, 20p more than the 148p a litre for unleaded car drivers.

The RAC analysis revealed that retailers are taking more than double the margin on every litre of diesel sold, compared to the 8.5p on unleaded.

As such, it said diesel drivers are “in effect subsidising petrol prices by charging more for diesel”.

If diesel were being sold at a fairer rate, drivers would be paying no more than 155p a litre for diesel, taking the average cost of filling up a 55-litre family car down to £85.25 from £92.40 (£7 less).

It is calling on retailers to “urgently cut the price of diesel to fairer levels” after member-only retailer Costco slashed 4p off diesel at its sites across the UK. Here, drivers pay an average of 154.7p a litre which is 13p less than the UK average, and 11.5p less than the average price at the largest four supermarkets with fuel forecourts.

‘Diesel prices remain stubbornly high’

RAC fuel spokesman, Simon Williams, said: “While our data shows petrol is generally being sold at a fair price at forecourts at the moment, drivers of the country’s 12 million diesel cars – as well as almost every white van driver – have every right to feel hard done by as they’re paying a huge premium for the fuel which in no way reflects its lower wholesale cost.

“For nearly a month, the gap between wholesale petrol and diesel prices has been less than 10p a litre and in recent days it has reduced to just 3.5p, yet average diesel prices at the pumps remain stubbornly high having fallen by only 2p since the start of February. The fact membership-only retailer Costco has been able to cut the average price of a litre of diesel by a massive 4p this week shows what’s possible, but we badly need other fuel retailers to treat drivers of diesel vehicles fairly.”

Williams said that even though the price of diesel isn’t being cut as quickly as it should be, the gap between the average prices of petrol and diesel has dropped to under 20p for the first time since 10 October 2022.

“If retailers now do the right thing this should reduce significantly, saving drivers who rely on diesel a lot of money every time they fill up,” he added.

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