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