Motorists are paying 10p more for petrol despite falling fuel costs

They are bikers getting a “raw offer” at the pumps despite a record price drop last month, analysis shows.

The RAC accused retailers of failing to pass on the reduction in the wholesale price of unleaded petrol to motorists.

Although average motor vehicle prices fell by 12.3p to 169.8p a liter at the end of August – the biggest monthly drop since records began 22 years ago – the motoring body said they should fall further to around 161p.

Spokesman Rod Dennis said: “Twelve pence a liter is a lot to reduce prices in a month, so there’s no doubt things could be worse, but in reality petrol drivers are still always getting a raw deal at the pumps.

“For whatever reason, major retailers are making choices cannot bear the reductions in full in the wholesale price of unleaded fuel, which they have benefited from for some time.

“There are very strong reasons for the largest fuel retailers to continue to lower their forecourt gasoline prices.”

At 161p, retailers would still make a generous 10p per liter margin, the RAC said.

“Some of the big supermarket sites aren’t too far from charging for it. But it’s a real zip code lottery out there, with prices varying greatly depending on where in the country the driver is.

“Drivers need to shop around for the best deal they can and we applaud those independent retailers who are doing their best charge a fairer fuel price and supporting their local communities at this incredibly expensive time.”

Fuel costs have skyrocketed

At 183.7p, the average price for a liter of diesel at the end of August was a “fairer reflection of wholesale costs”, the RAC said.

Fuel costs for drivers dramatically increased this year, when the price of crude oil rose sharply after the war in Ukraine. Refinery costs have also risen, adding to supply pressures after refining capacity was shut down during the pandemic. The fall in the value of the pound is additionally inflated prices as it raised the cost of imports.

In July, the CMA, the competition watchdog, launched an investigative study into the relationship between wholesale and retail prices, due to be published in the autumn. A previous review showed that rising oil refining margins were one of the main causes of the rise in fuel prices earlier this year.

The rise in the price of crude oil when it enters refineries to the wholesale price when it leaves them as petrol or diesel has more than tripled to almost 35p a liter in 12 months, the regulator said.

August MPs accused the merchants of profiteering due to fluctuations in the wholesale price, posting margins of 23.59p, the largest recorded in the RAC data set going back almost a decade.

Craig Mackinlay, Conservative MP and chairman of the Fair Fuel All-Party Parliamentary Group, said: “We should see cuts of at least 25p per liter across all pump fuels. The public has come to its own conclusions that excessive profiteering is at play somewhere or at several points in the supply chain.”

The CMA has been called on to do more to find out why retailers are not passing on savings to consumers more quickly.