Petrol car drivers continue to overpay at the pumps
The average price of petrol last month fell 12.31p to under 170p a litre – the largest monthly drop on record.
But according to the RAC’s Fuel Watch analysis, pump prices “remain a long way off” what it considers to be fair, given current wholesale fuel costs.
And supermarkets which have traditionally led on fuel prices, aren’t necessarily the cheapest places for drivers to fill up with unleaded, with independents in some locations choosing to undercut them and charge a fairer price for the fuel.
The average price of a litre of unleaded is now 169.8p (back to May’s level), taking the average cost of filling up a 55-litre car from £100.16 at the start of August to £93.39 at the end of the month.
Despite this drop, the RAC said average forecourt petrol prices should actually be around 161p given that the delivered wholesale price of petrol has fallen to 124.08p, and allowing for a “significant” retailer margin of 10p per litre.
‘Dark clouds are beginning to gather once again’
When the delivered wholesale price of petrol was last at this level in April, retailers were charging an average of 162p per litre.
However, while the cost of oil – the biggest contributor to wholesale petrol and diesel prices – fell significantly in August (down $7.67 to end the month at $92.36), the RAC said “dark clouds are beginning to gather once again”.
It explained that OPEC+, which represents many of the biggest oil producing nations, may choose to cut production at a meeting next week. If it does, oil prices may begin to rise once again.
This comes as sterling suffered its worst performance against the US dollar in August since October 2016, with a pound worth just $1.16 by the month’s end, which – as fuel is traded in dollars – makes it more expensive to purchase on the wholesale market.
Meanwhile, diesel drivers saw 8.35p come off the average price of a litre, taking it to 183.71p, which the motoring group “considers is a fairer reflection of wholesale prices”. Overall, it means it 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.
‘Deeper fuel duty cut required’
The RAC has called for the new incoming Prime Minister to offer more support for drivers, noting that the French government increased its discount on fuel to 30 cents from 15 cents on 1 September, resulting in pump prices under the equivalent of £1.50 a litre across the country.
Rod Dennis of the RAC, said: “Twelve pence a litre is a lot to come off prices in a single month so there’s no doubt things could be worse, but in reality, drivers of petrol vehicles are still invariably getting a raw deal at the pumps. For whatever reason, major retailers are choosing not to pass on in full the reductions in the wholesale price of unleaded they’ve been benefiting from for some considerable time now – and this continues to mean drivers are often paying much more every time
“There’s also no getting away from the fact that fuel can make up a huge chunk of a household’s monthly expenditure alongside energy costs. With many people heavily dependent on the car – whether that’s to transport children now that new school terms are underway again, or to see friends and family in different parts of the country – drivers need all the help that they can get.
“We urge the incoming Prime Minister to heed our calls for more financial assistance for drivers, such as a deeper cut in fuel duty, and to look carefully at the much more generous packages of help being offered to those in other countries across Europe.”