Major retailers urged to reduce petrol prices by 5p per litre

Current analysis reveals that petrol prices remain high compared to wholesale costs, with consumers losing out, while retailers profit

The RAC is urging the UK’s largest fuel retailers to lower the price of petrol by a minimum of 5p per litre, bringing it down to 150p per litre to better align with the considerably lower wholesale costs they currently enjoy.

At present, the 5p duty cut introduced by the government following Russia’s invasion of Ukraine last year doesn’t appear to be benefiting consumers grappling with the rising cost of living.

Instead, it seems to be bolstering the profit margins of retailers who have opted to increase their markups, according to RAC.

Despite oil trading at around $90 (£74.2) per barrel and a pound sterling exchange rate of $1.2 (£0.99), the wholesale price of petrol, as delivered, averaged just over 113p per litre last week.

This means that, with the UK’s average unleaded petrol price standing at 155.33p per litre, the average retailer margin exceeded 16p per litre before the addition of VAT.

This contrasts with the long term average of 7p per litre and surpasses the 10p margin smaller, independent retailers argue is now fair due to inflation.

Even diesel, which currently averages 162p per litre across the country, appears to be overpriced by around 4p per litre.

Last week, a litre of wholesale diesel averaged 123p, resulting in an average retailer margin of around 12p, in contrast to the 8p long term average tracked by the RAC since 2012.

RAC fuel spokesman Simon Williams said: “Our analysis sadly shows that despite the Competition and Markets Authority’s investigation confirming drivers were being ripped off at the pumps – something we have been saying for years – and the government acting on the findings, nothing has changed.

“Our data shows the big four supermarkets’ margin on petrol has been around 14p this month compared to an average of 7p so far this year and, shockingly, this is up from just 3.4p for the whole of 2019.”

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