Fuel retailers profit from “inflated” diesel prices

Diesel prices remain unnecessarily high, according to the RAC, as falling wholesale prices fail to be reflected at the pumps.

Despite both crude oil and wholesale diesel costs – the prices retailers pay for the fuel – reaching their lowest points in 15 months, major retailers are still refusing to cut pump prices in any meaningful way.

RAC Fuel Watch figures show that retailers are today taking an average margin of nearly 19p for every litre of diesel they sell, which is double what they took through 2021 and 2022 (average of 9p), and nearly three times as much as they did at the start of last year (average of 6p) before duty was cut to 52.95p on 23 March 2022.

In the last four weeks, wholesale prices have come down another 10p yet this has yielded just a 3p cut at the pumps (168.85p to 165.89p today). What’s more, the gap between the wholesale cost of petrol and diesel has been narrowing for many weeks and is currently just over 1.5p. Despite this, the difference drivers pay at the pumps remains stubbornly high at around 19p a litre.

RAC fuel spokesman Simon Williams said: “At a time when so many households are struggling with the rising cost of living, we’re pleased the Chancellor did the right thing for drivers and kept fuel duty low in Wednesday’s Budget.

"Unfortunately though, the pricing tactics of major retailers mean that diesel drivers in particular – including those who work for millions of small businesses – are still getting a really miserable deal at the pumps, and effectively aren’t seeing any benefit from the 5p duty cut whatsoever – as retailers are taking nearly four times this amount in margin with every litre they sell. So, in a peculiar way, it feels like it’s retailers who are benefiting from the lower duty cut right now, and not motorists."

He continued: “Drivers and small businesses have every right to feel aggrieved.

"We’re in a ridiculous situation where it would take just one major retailer to do the right thing and cut diesel prices to more sensible levels for a ripple effect to take place across the country’s forecourts, benefiting hard-up households everywhere. Instead, no retailer wants to blink first, with the result being millions of drivers forking out far more when they fill up than they should.

Two weeks ago, the RAC highlighted how easy it was for retailers to slash diesel prices given how low the wholesale price had fallen.

"It’s a sad reality that prices have merely trickled down by only around a penny since then," said Williams. 

"We now hope at least one major retailer finally decides the time is right to cut the prices to more reasonable levels, which will surely mean others follow.

"If this doesn’t happen, the best drivers can do is shop around and try to find a forecourt that’s charging less than the RAC Fuel Watch average.”