The RAC said the wholesale price of petrol last week was 103p a litre (Image: Getty)
Drivers are being ripped off by 6p a litre on fuel or £3.90 every time they fill up, according to the RAC.
The motoring organisation says a fall in wholesale cost of petrol and diesel together with a rise in the value of the pound against the dollar, means retailers have scope to cut prices.
However, instead retailers, including supermarkets, continue to push up the margins between what they pay for fuel and how much they charge drivers to historic highs.
The Competition & Markets Authority (CMA) recently reported that this resulted in British drivers being ripped off by around some £1.6 billion a year.
Historically, the big supermarkets, led by Asda, drove competition across UK petrol forecourts as a way to attract shoppers.
READ MORE Brewers say new green levy will mean the end of traditional beer bottles
However, the stores dropped this policy during the energy price crisis triggered by Russia’s invasion of Ukraine and have since maintained a new status quo of higher margins, hitting drivers in the pocket and fuelling inflation across the economy.
Industry trade bodies argue that retailers are taking higher margins to reflect increases in the cost of doing business, such as the need to pay staff more.
However, some smaller petrol retailers along with Costco, who have all the same costs as the major chains, are offering much cheaper fuel.
The RAC said the wholesale price of petrol last week was 103p a litre yet drivers were being charged 142p at the pumps.
It said this is around 6p a litre too high, which equates to being overcharged by £3.90 every time someone fills a 65 litre car tank.
Looking at diesel, the RAC Fuel Watch research puts the average figure per litre at 147p, but it argues a fair price would be 139p.
RAC analysis found the UK has had the most expensive diesel in Europe for the last 16 out of 17 weeks. This is despite a 5p duty discount that was implemented by the Conservative government to protect drivers and could be removed by Labour.
The motoring organisation said: “The recent fall in the price of oil and the strengthening of the pound – the two biggest factors in determining the wholesale price of petrol and diesel – present an opportunity for retailers to regain the trust of drivers by reducing their pump prices significantly.”
Some smaller retailers are undercutting their much larger supermarket rivals. For example, at Portlethen in Scotland a newly opened forecourt under the banner of EG On The Move was selling both petrol and diesel for 16p less than its nearest rival, Asda. This led to Asda quickly cutting its prices to match.
The new site at Portlethen is one of several that have been opened in recent months in a deal between retailer Co-op and EG On The Move.
The EG Group is run by Zuber Issar, whose brother Mohsin now runs the Asda empire. EG Group sold the vast majority of its forecourts to Asda in a deal last year but retained 31 sites that are now being converted to EG On The Move forecourts.
At the notoriously cheap Essar-branded Grindley Brook independently run forecourt in Whitchurch, Shropshire, a litre of unleaded will only set drivers back 130.9p, and diesel 133.9p. This is just slightly lower than membership-only retailer Costco which is charging an average of 130p for petrol at its 20 sites and 134.7p for diesel.
RAC head of policy Simon Williams said: “The biggest retailers’ refusal not to reduce their prices to fairer levels is continuing to cost drivers dear, and it’s all the more outrageous when you factor in the fact we’re all meant to be benefitting from a temporary 5p cut in fuel duty, that looks likely to disappear in the coming months.
“While the Competition and Markets Authority has clearly stated drivers were overcharged last year, it’s blatantly apparent from our data that this problem is persisting this year.
“Once again, we urge retailers to do the right thing and reflect the lower prices they’re paying for wholesale fuel on their forecourts. It’s plain for all to see from some of the lower prices being charged around the UK, both across the whole of Northern Ireland and at various other forecourts, that fuel can and should be sold much more cheaply.
Drivers are being ripped off by 6p a litre on fuel (Image: Getty)
Mr Williams continued: “Our analysis shows pump prices at a majority of forecourts should be cut by around 6p for both petrol and diesel. With wholesale prices down, drivers should not be seeing forecourt prices this high, especially as they are supposed to be benefitting from a 5p fuel duty cut. Our Fuel Watch data shows that this is happening as it should in Northern Ireland but, for whatever reason, it doesn’t appear to be on this side of the Irish Sea.
“Average retailer margin currently stands at 13p for petrol and a whopping 15p for diesel. This is staggering when compared to the long-term margin figures of 8p for both fuels.
“If a small individual retailer like DA Roberts at Grindley Brook in rural Shropshire is comfortable charging 131p a litre for petrol, surely the multimillion-pound businesses that are the big supermarkets ought to be able to get much nearer to that?
“If prices don’t fall dramatically in the next week or so, we believe the Government and the CMA should get all the biggest retailers together to demand an explanation. Tough action needs to be taken to change this as drivers are losing out badly every time they fill up.
“Artificially high pump prices also contribute to a higher level of inflation – so if prices were nearer where they should be, inflation would be lower, benefitting borrowers and the wider economy.”
Drivers looking to save money on their fill-ups can take advantage of the fuel finder feature in the free myRAC app. The app can be downloaded for free from the App Store or Google Play. Up to 10 searches a day can be made over a two, five or 10-mile radius, with each giving the five cheapest prices.
