With retailers having been found by the Competition and Markets Authority to have overcharged drivers by £1.6bn in 2023, the RAC believes 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.
Data from RAC Fuel Watch shows the delivered wholesale price of petrol averaged 103p a litre last week which, with a retailer margin of 10p – 2p more than the long-term average of 8p, should lead to average prices of just under 136p including VAT, a whole 6p lower than the current UK average of 142p.
Diesel, which is currently averaging 147p, should be being sold for 139p with a 10p retailer margin given the wholesale price of 106p. Further RAC analysis reveals that the UK has now had the questionable honour of having the most expensive diesel in Europe for the last 16 out of 17 weeks, and that’s even with a 5p fuel duty discount.
The average price of a litre of unleaded bought at one of the big four supermarkets, which dominate UK fuel sales, is 138p and diesel is 143p. Interestingly, their petrol is priced the same as the average price charged across the whole of Northern Ireland but diesel there is still 3p cheaper than at UK supermarkets, at an average of 139.7p.
The RAC is also aware that some retailers are undercutting their much larger supermarket rivals. 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 latter run by EG Group’s 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.
Drivers looking to save money on their fill-ups should 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.
The RAC Fuel Watch web page has more information about the average price of petrol and diesel at the big four supermarkets and at motorway services. It also features graphs showing average prices since 2000 as well as a daily financial breakdown of the cost of a litre of petrol and diesel.
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