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Petrol prices fall but supermarkets still overcharging

Petrol prices fall but supermarkets still overcharging
Rebecca Goodman
Written By:
Rebecca Goodman
Posted:
05/01/2024
Updated:
05/01/2024

Drivers saw a 6p per litre fall in the price of petrol in December and the price is now at a similar level as seen in February 2022, before the Russian invasion of Ukraine.

Across the UK petrol fell by 6p a litre on average, to 140.58p by the end of the month, but the RAC says prices should be falling faster.

After the price drop, it now costs £77.32 to fill a 55-litre car tank, a fall of £3.40 in a month.

Drivers with diesel cars also saw a price drop, with the price coming down by 5p to 149.18p a litre, a saving of £2.86 when filling up a full tank at a cost of £82.05.

Drivers in London paid the most on average, at 142.41p for a litre of petrol and 151.10p for a litre of diesel while those in Northern Ireland paid 135.28p and 144.20p respectively.

Over the last year, fuel costs soared due to the war in Ukraine but the cost of a barrel of oil has now returned to under $80, after reaching $130 in 2022.

The report comes as driving costs have risen by £267 in a year and are becoming increasingly unaffordable.

Supermarkets could ‘easily’ be charging less

But despite the price cuts, the RAC says supermarkets need to cut costs further. It said if the supermarkets were taking “fairer, smaller margins” drivers would be paying less.

In December the average margin on a litre of fuel was 13p across UK supermarkets, double the level it was in 2021.

Data from the RAC showed that if this margin was 10p instead, divers would be paying around 137p for petrol, not 140p as they currently are.

It also found an independent petrol station in Shropshire which is charging less than the big supermarkets, at 130.9p for a litre of petrol, and 139.9p for diesel, a saving of 7p and 6p per litre when compared to the supermarkets.

Last year an investigation by the Competition and Markets Authority (CMA) showed that some retailers were overcharging drivers for fuel.

A new comparison website for petrol prices was also proposed by the government to help drivers to find the cheapest prices near them. The RAC also has a free app which provides this data and it claims drivers can save 6p a litre on average by using it.

‘Something has to be very badly wrong’

RAC fuel spokesman, Simon Williams, said: “It’s surely impossible to argue that competition is working properly if prices are so vastly different in two parts of the UK. And if an independent retailer in the middle of Shropshire can be undercutting the supermarkets by around 6p a litre, something has to be very badly wrong.

“We continue to call on the biggest retailers to play fair with drivers and lower their prices to match what’s being charged in Northern Ireland.

“We also urge Energy Security Secretary Claire Coutinho, who is on a mission to bring greater transparency to fuel pricing following the CMA’s investigation concluding drivers were overcharged to the tune of £900m in 2022, to ask the supermarkets why they won’t charge similar prices to the averages seen across Northern Ireland.”