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Diesel prices fall 7p but drivers still suffer ‘poor value at the pumps’

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
01/06/2023

Diesel prices remained stubbornly high as wholesale costs fell back but they have come down by 7p a litre in the past fortnight. However, diesel drivers continue to get a poor deal, according to a motoring group.

The average price of a litre of diesel at supermarkets has fallen 7.44p a litre, from 151.02p to 143.58p since 15 May.

According to the RAC, supermarkets have “quickened the pace of cutting the price of diesel” since the Competition and Markets Authority revealed that average margins in 2022 had increased compared to 2019.

As such, the CMA expressed concern over weakening competition in the retail fuel market, which seems to have added to the pressure on retailers to cut pump costs.

Further, retailers have been urged by the RAC to cut the price of diesel since its wholesale price fell below petrol’s at the end of March.

The RAC said the big four supermarkets were selling unleaded for around 143p a litre for the whole of the month of April. Yet diesel prices remained “stubbornly high”, only seeing a 10p a litre reduction from 161.4p to 151.02p in the month before the CMA released its road fuel market study two weeks ago.

It revealed that the gap between the average prices of a litre of petrol and diesel at supermarkets was 9p on 15 May, yet by Monday this difference had shrunk to just 2.5p – “a further indication that these retailers have been apparently jolted into action by the CMA”.

However, the RAC added that supermarket diesel prices should be around 6p a litre cheaper than they are today (137p) if a fair price was being charged.

The average price of a litre of unleaded at a supermarket is currently 140.64p while diesel is 2.5p more expensive at 143.14p.

‘Diesel price cuts long overdue’

RAC fuel spokesman, Simon Williams, said: “Since the Competition and Markets Authority’s made its announcement about supermarkets increasing their margins compared to three years ago and said they will be formally interviewing bosses, it appears the rate at which the price of diesel has fallen has sped up.

“Significant cuts to the price of supermarket diesel were long overdue as its wholesale price has been below petrol’s since the end of March. As a result average retailer margin on diesel had reached 22p a litre – more than three times the long-term average of 7p.

“Even today, with 27p having come off the average price of supermarket diesel since the start of the year, diesel drivers are continuing to get a poor deal. For two straight months it has cost retailers less to buy diesel on the wholesale market than it has petrol, yet they continue to charge more for diesel at the pumps.”

Williams added that while wholesale price changes take some time to filter through to smaller forecourts which only buy new stock every few weeks, “we can’t see any reason why the supermarkets still haven’t cut their prices to fairer levels as they buy much frequently”.

He said that the results of the CMA’s review within the next four weeks could “herald an end to poor value at the pumps”.

“We also hope it means the biggest retailers start charging fair prices at all of their sites across the country, and not just at those where they’re competing directly with other forecourts locally. It can’t be right that the same brand can sell fuel for so much more in one part of the country than another – this sort of postcode lottery is wholly unfair to drivers and completely unjustifiable,” Williams added.

The RAC data revealed membership-only retailer Costco charged an average of 134.5p for a litre of petrol and 136p for a litre of diesel.