UK forecourt petrol and diesel prices fell by around 9p per litre last month, according to new figures from the RAC. However, the motoring organisation says fuel retailers are still charging drivers over the odds for both fuels, despite an ongoing investigation by the Competition and Markets Authority (CMA).
The RAC’s Fuel Watch tracker, which monitors average fuel prices across the UK, showed average petrol prices fell by 8.4p per litre in December, hitting 151.06p per litre. Similarly, diesel prices fell by 9.4p per litre, taking the average to 173.97p per litre. As a result, filling a typical family car’s 55-litre tank with petrol was £4.63 cheaper at the end of December than at the beginning of the month, whereas the difference stood at £5.19 for diesel drivers.
Nevertheless, the RAC says drivers are still being overcharged by around 10p per litre for petrol and 14p per litre for diesel. The organisation points to the wholesale cost (the amount retailers pay for the fuel) of petrol standing at 106p per litre, while diesel cost around 123.4p per litre. Even with a 10p-per-litre profit, which the RAC says would be 3p more than the long-term average, the RAC believes petrol prices should be around 140p per litre while diesel should cost around 160p per litre.
Intriguingly, fuel prices in Northern Ireland were much closer to those figures than those in the UK, suggesting there may be some merit to the RAC’s argument. The Fuel Watch initiative showed Northern Irish customers were paying an average of 144.4p per litre for petrol at the end of December – almost 7p per litre less than the UK average.
The discrepancies come despite an ongoing CMA investigation into so-called ‘rocket-and-feather’ pricing, which sees retailers increase prices rapidly in line with wholesale costs, but then reduce prices slowly, thus inflating their margins. The CMA’s initial findings have already found evidence of the practice during 2022, and the organisation is investigating further.
“On the face of it, December looks like a good month for drivers, with 9p coming off at the pumps on top of November’s 6p,” said the RAC’s fuel spokesperson, Simon Williams. “But there’s no question that the drop should have been far bigger given how far wholesale prices have come down. For weeks we’ve been calling on the big four supermarkets to cut their prices more substantially to give drivers a fairer deal when they fill up, so even though they have reduced their prices collectively by more than 10p a litre in December, they are still nowhere near where they should be given the scale of the drop in wholesale prices. We hope the Business Secretary’s intervention just before Christmas puts more pressure on larger retailers to do the right thing.
“Looking at prices in Northern Ireland is a good reference for what should be happening across the rest of the UK as petrol was 4.5p cheaper there than the UK average at the start of December but was nearly 7p lower at the end of the month at just 144.43p. For diesel the difference is even more pronounced as a litre was 7p cheaper at the beginning of December and 9.5p less by the close at 164.55p. If fuel can be sold this cheaply in Northern Ireland, then this must mean something is very wrong with fuel retailing in mainland UK.
“Prices are also considerably cheaper in Europe as the average price of a litre of unleaded is 144p and diesel 152p. And just across the Channel in France unleaded is an average of 146p and diesel 154p. In fact, when compared to the 27 EU countries, we currently have the second most expensive diesel and the sixth most expensive petrol.”