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Petrol and diesel prices fall again but drivers are still paying too much

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Petrol and diesel prices fell for the third month in a row in January, but drivers are still paying over the odds.

Data from RAC Fuel Watch shows the average price of unleaded fell by 1.32p to 120.92p, while diesel dropped 1.27p to 130.01p.

This means filling up a typical family car with petrol cost £65.78 on average, £6 less than it did at the end of October. A tank of diesel fell £3.78 to £71.50 over the same period.

However, based on the wholesale price of fuel, drivers should have been paying far less for petrol and diesel, according to the RAC.

While prices at the country’s four biggest supermarkets were an average of 3p a litre lower at 116.66p for petrol and 125.43p for diesel, three of the retailers – Morrisons, Sainsbury’s and Tesco – did not cut prices by as much as they should have.

RAC figures show the wholesale price of petrol stayed flat in January while diesel increased by 2p a litre, but when compared to retail prices they were low still low enough to demand pump price reductions during the month.

Sadly for drivers, retailers did not pass these savings on to customers.

RAC fuel spokesperson Simon Williams said: “While it’s obviously good news the price of fuel has fallen for three months in a row, the story behind the simple forecourt average figures is quite disturbing. Looking at the wholesale data over the last two months reveals that we should have been paying far less for our petrol and diesel than we have been.

“Unfortunately, three of supermarket fuel retailers appear to have changed their pricing policies for the long term by increasing the margin they take on a litre of petrol to about 2p.

“This has meant the average price of unleaded has not reduced by as much as it should have because smaller retailers nearby haven’t had to lower their prices as much in order to compete.”

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