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Pump prices fall by a fraction

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11/07/2022
Petrol and diesel prices fell by a fraction over the course of a week, but wholesale prices have continued to plummet.

Average petrol prices ended last week at 190.95p per litre, while diesel fell slightly from 198.68ppl to 198.42ppl on Sunday.

According to RAC fuel spokesman, Simon Williams, the fractional falls of under a penny a litre in the average price of both petrol and diesel over the course of a week when wholesale prices have plummeted are an “irremovable stain on major retailers’ reputations”.

He added it’s “frightening” that this is going on “under the nose of the Competition and Markets Authority” which last week published its report into the fuel market.

The CMA confirmed it had launched an investigation following pump price concerns after looking at retailer spread (the gap between wholesale prices and retail prices), and refining spreads (the gap between the price of crude oil entering refineries and the wholesale price of petrol and diesel leaving them).

Williams said: “Whatever the situation is with the issue it has identified with refining margins, there is still a wholesale price and a retail price – and the gap in between is retailer margin. When this grows significantly, it should always be a cause for concern as it’s a sign drivers are being taken for a ride.

“Just this weekend there have been queues to buy more fairly priced fuel at wholesaler Costco in Manchester and a major supermarket running a fuel discount promotion – both signs that petrol and diesel are substantially overpriced.

“Independent retailers’ claims that the CMA’s report ‘exonerated’ them is interesting to say the least when recent analysis of wholesale and average retail price data tells a very different story.”

Williams added that the weekly wholesale price of petrol has fallen by 12p a litre over the last six weeks. Last week it averaged just 140.5p “so it’s very wrong that drivers are still paying 190.65p across the UK”.

He said: “When factoring in a generous 10p a litre retailer margin and 20% VAT the cost of a litre should be around 181p. While the CMA’s review concluded that retailer margins are only a relatively small component of the pump price at around 10p a litre, it’s worrying to see margins are currently averaging closer to 15p.”

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