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Big retailers failing to pass fuel prices cuts on to motorists

03 Aug 2022 3 minute read
Photo Nicholas.T.Ansell PA Images

Major retailers are failing to reduce petrol prices in line with falling wholesale costs, the RAC has warned.

The roadside recovery firm said wholesale cost of unleaded – the price when it arrives at forecourts – is now back down to its early May price of 131.75p per litre, which saw average pump prices of around 167p per litre.

But drivers are currently paying an average of 183p per litre at pumps despite the drop in wholesale costs, the RAC said.

It comes after fuel prices hit their highest-ever levels earlier this summer as the cost-of-living crisis began to bite.

The wholesale cost of petrol has fallen by 20p since early June, according to the RAC.

Yet retailers continued to increase their prices in June and only dropped their pump prices by an average of 9p during July, the firm said.

This means drivers filling up at the end of July average of 183p per litre could be paying almost £9 a tank more than they should be.

£6 pounds lower

Equally, the firm said drivers should now be paying about 182p per litre for diesel – nearly £6 a tank lower than the end of July average of 192p per litre.

The “big four” supermarkets – Tesco, Asda, Morrisons and Sainsbury’s, along with several other suppliers – have been facing criticism for failing to reduce their prices in line with falling wholesale costs.

The RAC said that while several reduced their prices last week, the cuts are not enough to be in line with the wholesale cost.

RAC fuel spokesman Simon Williams said: “July has been an unnecessarily tough month for drivers due to the big four supermarkets’ unwillingness to cut their prices to a more a reasonable level, reflecting the consistent and significant reductions in the wholesale cost of petrol and diesel.

“As it was, we saw independent retailers leading the charge with fairer pump prices appearing all around the country which eventually forced the supermarkets to finally implement a more substantial cut late last Friday afternoon.

“What ought to have happened is that the biggest retailers cut their prices more significantly on a daily basis, given the wholesale price of petrol has fallen steadily over the last eight weeks.”

Mr Williams advised drivers that they should no longer assume supermarkets are the cheapest places to get fuel.

Shop around

He said motorists should “shop around as it’s highly likely you’ll find an independent retailer which is doing the right thing and fairly reflecting their lower wholesale costs by charging a lower price”.

He added: “This is really encouraging because the independents buy new stock less frequently than the supermarkets as they don’t sell as much, and consequently aren’t as well positioned as their rivals to be able to snap up fuel at lower prices when there are sudden market drops.”

A spokesperson for Sainsbury’s said: “We are committed to offering motorists great value and over the weekend we lowered the price of petrol and diesel across our forecourts. We price locally and competitively.”

Tesco, Asda and Morrisons have been contacted for comment.

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1 year ago

The evidence is out there for all to see. Energy and fuel companies are raking it in having been fed a unrivalled opportunity to gouge the consumer and most businesses for whom distribution is an essential function. In turn food retailers have jacked up prices by more than necessary to reflect their cost base movements. Result ? surges in profitability, dividends to institutions, senior executive salaries, donations to Tory party, while the rest of us have to lump it.

Mab Meirion
Mab Meirion
1 year ago

A word of thanks to Prysor Service Station of Trawsfynydd for always playing fair with us…

Peter Cuthbert
Peter Cuthbert
1 year ago

It looks as if we will need to shop around carefully and, as ever, shop local if we can. To be fair to many small retailers they are often unable to get supplies at a price below that at which the big supermarkets are selling stuff. That may be true with fuel too.

Don’t forget to look at the website. If it can get to over a million pledges then the Government will just have to act. Astonishing to hear that Martin Lewis is recommending it as one of the few solutions for getting the Government to act.

Steve Duggan
Steve Duggan
1 year ago

Well just one word comes to mind ‘Greed’.

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