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Drivers ‘paying 10p too much’ for petrol

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Motorists are getting a "raw deal" at the pumps despite a record price drop last month, according to analysis.

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

Although average forecourt prices sank by 12.3p to 169.8p per litre at the end of August – the largest monthly drop since records began 22 years ago – the motoring organisation said they should have fallen further to around 161p. 

Spokesman Rod Dennis said: "Twelve pence a litre is a lot to come off prices in a single month so there's no doubt things could be worse, but in reality drivers of petrol vehicles are still invariably getting a raw deal at the pumps. 

"For whatever reason, major retailers are choosing not to pass on in full the reductions in the wholesale price of unleaded they've been benefiting from for some considerable time.

"There is a very strong case for the biggest sellers of fuel to cut their forecourt petrol prices further."

The RAC said that at 161p, retailers would still be making a generous 10p a litre margin.

"Some big supermarket sites aren't too far off charging this. But there's a real postcode lottery out there, with prices varying wildly depending on where a driver is in the country.

"Drivers must shop around for the best deal they can, and we applaud those independent retailers who are doing their best to charge a fairer price for fuel and support their local communities through this incredibly expensive time."

Fuel costs increased dramatically

At 183.7p, the average price per litre of diesel at the end of August represented a "fairer reflection of wholesale costs", the RAC said.

Fuel costs for motorists increased dramatically this year as the price of crude oil soared following the war in Ukraine. Refinery costs also rose, adding to pressures on supply after refining capacity was mothballed during the pandemic. A drop in the value of the pound has further inflated prices as it pushed up the cost of imports.

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

The increase from the crude oil price when it enters refineries to the wholesale price when it leaves them as petrol or diesel had more than tripled in 12 months to nearly 35p per litre, the regulator said.

In August MPs accused retailers of profiteering from swings in the wholesale price as they posted margins of 23.59p, the largest on record in the RAC’s dataset, which goes back nearly a decade.

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Motorists are getting a "raw deal" at the pumps despite a record price drop last month, according to analysis.

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

Although average forecourt prices sank by 12.3p to 169.8p per litre at the end of August – the largest monthly drop since records began 22 years ago – the motoring organisation said they should have fallen further to around 161p. 

Spokesman Rod Dennis said: "Twelve pence a litre is a lot to come off prices in a single month so there's no doubt things could be worse, but in reality drivers of petrol vehicles are still invariably getting a raw deal at the pumps. 

"For whatever reason, major retailers are choosing not to pass on in full the reductions in the wholesale price of unleaded they've been benefiting from for some considerable time.

"There is a very strong case for the biggest sellers of fuel to cut their forecourt petrol prices further."

The RAC said that at 161p, retailers would still be making a generous 10p a litre margin.

"Some big supermarket sites aren't too far off charging this. But there's a real postcode lottery out there, with prices varying wildly depending on where a driver is in the country.

"Drivers must shop around for the best deal they can, and we applaud those independent retailers who are doing their best to charge a fairer price for fuel and support their local communities through this incredibly expensive time."

Fuel costs increased dramatically

At 183.7p, the average price per litre of diesel at the end of August represented a "fairer reflection of wholesale costs", the RAC said.

Fuel costs for motorists increased dramatically this year as the price of crude oil soared following the war in Ukraine. Refinery costs also rose, adding to pressures on supply after refining capacity was mothballed during the pandemic. A drop in the value of the pound has further inflated prices as it pushed up the cost of imports.

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

The increase from the crude oil price when it enters refineries to the wholesale price when it leaves them as petrol or diesel had more than tripled in 12 months to nearly 35p per litre, the regulator said.

In August MPs accused retailers of profiteering from swings in the wholesale price as they posted margins of 23.59p, the largest on record in the RAC’s dataset, which goes back nearly a decade.

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