While the average price of petrol and diesel on the UK’s forecourts fell slightly in August retailers failed to fully pass on big savings in the wholesale price of unleaded to drivers, data from RAC Fuel Watch* has found.
A litre of petrol reduced 0.27p to 128.88p but the wholesale price came down dramatically by 4.38p to 96.57p. The situation with diesel was similar but not as pronounced – a litre decreased by 0.38p to 131.66p while its wholesale price fell by 1p a litre to 101.12p. This means the cost of a filling a family-sized 55-litre car came down by 15p to £70.88 for petrol drivers and 21p to £72.41 for those with diesel cars.
The average price for petrol at the country’s four biggest fuel retailers – Asda, Tesco, Sainsbury’s and Morrisons – was 125.41p (a reduction of 0.55p) and 128.04p diesel (0.6p saving on July). Both fuels are around 3.5p cheaper at supermarkets than other UK fuel retailers. At the end of August Asda recorded the lowest prices for both petrol and diesel at 124.08p and 126.05p respectively.
RAC fuel spokesman Simon Williams said:
“Drivers have the right to feel angry that the price of fuel did not fall more in August than it did. With nearly 4.5p coming off the wholesale price of petrol drivers should have seen, at the very least, 2p a litre being knocked off at the pumps by the end of the month.
“While the average price charged by the supermarkets came down a little more than the UK average they should really have led the way with larger cuts which would have spurred other retailers to reduce their prices too.
“By our calculations retailers ought to be charging around 126p for a litre of unleaded based on a wholesale price of 98p a litre, which many retailers will have bought at a couple of weeks ago, and then factoring in delivery, a reasonable margin of 5p a litre and VAT. As for the supermarkets they could easily be selling at around 122p.
“If you look at the average cost of fuel in Northern Ireland you can see this is possible as the average price of petrol there is 126.01p and diesel is also more than 2.5p a litre cheaper at 129.02p. If Northern Ireland can charge a fairer price why can’t retailers in the rest of the UK do it. For this reason we strongly urge all retailers outside of Northern Ireland to cut their prices in the next week by at least 2p a litre on both petrol and diesel.
“The lower wholesale prices seen in August are a result of a 5% drop in the price of oil over the month with a barrel going down from $62.47 to $59.09. The other price-determining factor – the sterling US dollar exchange rate – changed very little over the month leading to a pound being worth $1.21 at both the start and finish.
“There was a time when a 4.5p reduction in the wholesale price would have led the supermarkets to cut their prices significantly, but unfortunately those days seem to have passed as they no longer appear to have the appetite for them despite the clear wholesale market dip. Perhaps they are hedging their bets thinking there could be a further drop in the value of sterling which will could cause wholesale prices to increase again.”
Regional fuel price variation
Regional average unleaded pump prices (pence per litre)
|Yorkshire and The Humber||128.76||128.78||0.02|
Regional average diesel pump prices (pence per litre)
|Yorkshire and The Humber||131.35||131.37||0.02|
Motorists can keep abreast of the latest fuel prices by visiting the RAC Fuel Watch webpage.
Notes to Editors
* UK average fuel prices quoted in theRAC Fuel Watch August 2019 report are based on Experian Catalist data from 1 to 31 August 2019 (pump prices). Regional prices are based on Experian Catalist data from 2 to 30 August. Wholesale prices, oil price and the value of sterling are based on data from 1 to 31 August 2019.
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About the RAC
First formed in 1897, the RAC has been looking after the needs of its members for more than 120 years.
Today it has approximately 11m members and is one of the UK’s most progressive motoring organisations, providing services for both private and business motorists. Whether it's roadside assistance, insurance, buying a used car, vehicle inspections and checks, legal services or up-to-the-minute traffic and travel information – the RAC offers a solution for all motoring needs. The RAC is committed to making motoring easier, safer, more affordable and more enjoyable for drivers and road users.
The RAC supports the interests of its members and UK drivers at a national level. This includes voicing concerns about the increasing cost of motoring, particularly the price of fuel and the high level of tax levied on it, advancing levels of road safety, and supporting the needs of all drivers, from young to old.
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For the very latest news on UK fuel prices, check RAC Fuel Watch. It provides a comprehensive guide to the latest UK unleaded petrol and diesel prices – both at the wholesale level and at the pump - and tracks these prices daily to help drivers check if the price they pay to fill up is a fair one.