You are here: Home - Household Bills - News -

Retailers ‘taking drivers for a ride’ with higher fuel prices, says RAC

Written by:
Retailers do not have “any justification” for increasing the price of fuel while wholesale costs have dropped, the RAC has said.


Data from its latest Fuel Watch analysis showed the price rose by 3.1p for a litre of unleaded and 2.7p for diesel since last month. As of 30 November, prices stood at an average of 147.28p for unleaded and 150.64p for diesel even though wholesale costs fell by 7p in the middle of the month. 

Prices peaked on 21 and 20 November respectively, reaching 147.72p for unleaded and 151.1p for diesel. 

The car insurance company said the Omicron variant was the reason for the fall in wholesale prices towards the end of November, with a barrel of oil falling to $70.90 (£53.24), down from $84.74 (£63.82) at the start of the month. 

RAC has called on retailers to lower their prices or explain why they are charging customers these prices. It also asked retailers to reduce prices to “fairer levels” by around 12p for a litre of unleaded and 7p for diesel. Such a reduction would bring prices to 135p and 144p for unleaded and diesel respectively. 


No justification

Simon Williams, media relations manager for RAC, said: “Sadly, our data shows all too clearly that drivers are being taken for a ride by retailers at the moment. We can’t see any justification for the prices that are being charged at the pumps and are concerned that drivers on lower incomes who depend on their vehicles are being priced off the road altogether. 

“The wholesale petrol price, which is what retailers pay to buy new supply, dropped by 10p from mid-November, so we can’t see how any increase – let alone a 3p one – was warranted.” 

Williams said earlier in the pandemic, retailers’ margin on fuel improved as oil prices fell due to people staying at home and using cars less. However, he said despite the emergence of the new Covid variant, car use had returned to near-normal levels meaning retailers should not be “taking huge profits on every litre of fuel they sell”. 

He added: “We therefore urge them to do the right thing and cut their prices to much fairer levels as matter of urgency.” 

Williams also said competition in fuel retailing “isn’t working” demonstrated by no retailers defending their refusal to lower prices. He said there appeared to be no desire among the bigger providers to reduce prices and attract customers. 

“If a major brand were to cut its prices tomorrow, you can guarantee that within hours the others would do the same. It would be much fairer if retailers mirrored wholesale prices more closely on a daily or weekly basis,” Williams added. 


Government intervention 

Williams also called on the government to intervene to address the high price. 

He said: “It’s a sad fact that the Chancellor’s fuel duty freeze last month, while welcome, simply wasn’t anywhere near enough to ease the burden now being placed on millions of households who have no choice but to use their vehicles.  

“While the Chancellor could introduce a temporary cut in VAT on motor fuel it might be better for the government to ask the biggest retailers to explain why they’re charging such high prices for fuel when wholesale prices have dropped.” 

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week