Independent fuel stations lead pump price reductions

Independently owned fuel stations are more likely to offer fairer pricing that major retailers, according to the RAC.

The motoring organisation found that just 10% (407) of a sample of more than 4,500 UK forecourts are charging a ‘fair’ price for petrol and diesel, with the vast majority of these being independently owned sites rather than major fuel retailers.

The RAC believes that retailers should be charging nearer to 174p for a litre of unleaded to reflect wholesale prices over the last two weeks, well down on the current average of 188p – yet its analysis of data shows that only 157 petrol stations are selling a litre at between 170.9p and 179.9p. Of these, 125 are independently owned petrol stations, 28 are major supermarket sites and four are owned by oil companies. The remainder – some 4,436 (or 96%) of all the sites sampled – are selling unleaded at 180p or more a litre, way over what the RAC believes is reasonable based on the wholesale price.

The situation is hardly better when it comes to diesel, with the current average price of a litre standing at 196p. Taking the average delivered wholesale price over the last fortnight of 150p, plus 7p retailer margin and 20% VAT should give a pump price of around 189p per litre – yet just 250 out of 4,805 forecourts are selling at a price of between 180p and 189.9p. Interestingly, 192 of these are independently owned with just 43 being run by major supermarkets and 15 being oil company owned.

Traditionally, supermarkets have led the fuel market with the cheapest pump prices. At the moment however, the average price of a litre of petrol and diesel at the big four supermarkets is only around a penny lower than the UK average when it’s historically been around 4p.

The RAC continues to urge all retailers – but especially the larger supermarkets that sell the most fuel – to cut pump prices now to reflect the fact the wholesale cost of both petrol and diesel have been falling for six straight weeks now, as a result of the lower oil price.

RAC fuel spokesman Simon Williams said: “In this most expensive of summers, drivers need all the help they can get to keep their spending down so we applaud those retailers who are doing the right thing for their customers and charging a fair price for petrol and diesel, more in line with the lower wholesale costs.

“Weekly wholesale petrol prices – that’s the price retailers pay to buy the fuel – have fallen by a massive 17p a litre, from a weekly average of around 152p at the start of June to just 135p this week. Yet average pump prices have reduced by a paltry 4p. It’s time for every retailer to do the right thing and cut their prices to more reasonable levels.”

Fuel prices have surged since the start of the year, with prices at some forecourts exceeding £2 per litre.