Supermarkets hike pump prices above wholesale market increases
Supermarkets hiked pump prices “well above” the wholesale market increase in December as they sought to protect profits amid further coronavirus restrictions.
The average price of petrol rose from 114.39p to 116.46p – 2.07p a litre – while diesel increased from 117.72p to 120p in the month of December. This is a 2.28p a litre increase.
Meanwhile, the wholesale market saw increases of just 1.28p for unleaded and 1.11p for diesel.
As such, RAC Fuel Watch said drivers should be paying less for filling up their tanks – suggesting 113p for petrol and 118p for diesel.
It said that Morrisons, Sainsbury’s and Tesco all raised their forecourt prices by an average of 3p per litre and only Asda matched the wholesale market price increase.
The supermarket charged drivers 110.11p a litre for unleaded while diesel owners paid 113.4p.
However, despite the three supermarkets’ higher prices, it is still cheaper to fill up there than at other forecourts.
Overall, the cost of filling a 55-litre tank of fuel for a family petrol car rose by £1.14 from £62.91 to £64.05, and by £1.25 from £64.75 to £66 for diesel. Refuelling at a supermarket currently saves drivers over £2 a tank.
RAC fuel spokesman, Simon Williams, said: “It’s very disappointing to see some of our biggest fuel retailers putting up their prices over and above the increases seen on the wholesale market. There’s a definite feeling that they have been trying to protect themselves for what was to come in terms of further coronavirus restrictions.
“While wholesale prices went up very slightly in December our data shows there should be scope to lower forecourt prices rather than put them up. Retailers will no doubt argue that the pandemic is leading to drivers filling up far less so their ‘per litre’ profits are considerably down, and Monday’s announcement of another lockdown will be treated as justification for their decision not to pass savings on at the pumps. Unfortunately, those who still need to fill up regularly are having to pay more than they should be as, by our calculations, both fuels should actually come down by 3p a litre in the next fortnight.”
Williams added that the oil market is still being adversely impacted by Covid travel restrictions so it may be the case that drivers are paying less for their fuel than they might otherwise be.
Even though a barrel of oil was above $50 for half of December – something not seen since March last year – the wholesale price didn’t shoot up due to the pound gaining 2% on the dollar, he said.
He added: “Interestingly, retailers have adjusted their margins and are now making roughly the same on petrol as diesel whereas normally they take a larger margin on a litre of diesel. For example, in September the margin on diesel was 4.5p more than petrol at an average of nearly 11.5p (11.4p) a litre compared to around 7p (6.85p).”
However, he warned that once life begins to get more back to normal following the vaccination roll-out, fuel prices “will inevitably go back up again”.
“A year ago, a litre of unleaded set drivers back 127p and diesel 132p, which is 10p and 12p cheaper, respectively, than today,” he added.