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Price of diesel not falling fast enough, RAC says
Date: Friday, January 6, 2023 | Author: Sean Keywood
The price of diesel at UK filling stations fell during December, but not by enough, according to the RAC.
The motoring organisation said that the average cost of a litre of diesel fell by 9.4p, to 173.97p.
However, based on the wholesale price of the fuel, and even allowing for a retailer margin of 10p per litre – 3p more than the long-term average – the RAC said it should be costing around 160p per litre.
Petrol prices are also too high, it said, averaging 151.06p rather than its estimated fair price of around 140p, despite an 8p fall during December.
RAC spokesman Simon Williams said: “On the face of it, December looks like it was a good month for drivers with 9p coming off at the pumps on top of November’s 6p, 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.”
According to Williams, looking at fuel prices in Northern Ireland gave a good reference for what should be happening across the rest of the UK.
He said: “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.”
Williams said that, although Northern Ireland does benefit from a fuel price checker website run by the Consumer Council, this was not the main reason prices were lower there.
He said: “A combination of factors contributes to making fuel cheaper including a higher retailer-to-car ratio than in the wider UK, more fuel distributors as well as the presence of sometimes cheaper fuel across the border in the Republic of Ireland.
‘Interestingly, the supermarkets also don’t have the same hold on fuel retailing in Northern Ireland with only 28% market share compared to 43% on the other side of the Irish Sea.
“In Europe prices are also considerably cheaper 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.”
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