As $10 was shaved off the oil price in recent days, motoring groups demanded fuel retailers lower the prices of diesel and petrol this week.
RAC Fuel Watch data indicates that oil prices fell $10 a bar to $73.18 Friday, as demand increased following news about the Omicron Covid strain.
Unleaded currently costs 12p per litre more than it should due to falling oil prices, and the wholesale price of diesel has fallen for almost a week. Diesel, however, is still 10p above its normal cost, according their figures.
Drivers find themselves paying 12p per litre more for petrol. This is because the RAC called for retailers to lower the fuel price this week, after witnessing wholesale prices and oil falling in the past week.
Motoring bodies have warned that retailers should significantly lower their prices for pump fuel this week to avoid losing credibility with drivers.
The latest fuel prices show that unleaded currently costs an average of 147.64p per litre, while diesel runs at 150.85p.
However, the retail giants should have reflected the downturn in the wholesale market. They would be at 135p and 141p, respectively.
As motorists face record-high fuel prices and a fifth week, the latest demand for lower pump prices comes.
Both diesel and petrol have surpassed previous records before the October end and have never sunk below them since.
It means the cost to fill an average petrol family car’s 55-litre fuel tank currently costs approximately £19 more than it did a year ago.
The price of diesel and petrol would be reduced by 10p each if the price fell to 12p per litre. This is well below April 2012’s record (142.48p/litre for petrol; 147.93p/litre for diesel).
Fuel price analysts recently pointed out that while the wholesale fuel price had fallen by 5.6p a litre one week ago, these savings have not been passed onto drivers.
The AA said last week that motorists should have seen a ‘substantial drop’ in pump prices in recent days following the fall in wholesale petrol and diesel in the last week, which would have translated to savings of up to £3 each time drivers fill up.
The RAC claimed that retailers were living up to the most egregious ‘rocket and bird’ behaviour, refusing to lower their pump prices. It is quite different from what they do when wholesale prices rise – which would be to keep increasing them daily.
Both petrol and diesel would be much cheaper if they were to drop by 12p/ 10p per litre, respectively. This would bring an end to 5 weeks of high costs for drivers.
Simon Williams, a spokesperson for fuel, stated that petrol is 6p more expensive than it was ten days ago due to the fall in wholesale prices.
The market’s largest retailers have been able to stand strong, and they are now making more profit on each litre sold than in the past.
“On Friday, the Omicron Covid news caused the price of oil to drop by $10, leading to further fuel price drops.
Retailers are making an average of 19p per litre now, which we think is quite shocking considering their pre-Covid margins of 6p
We estimate retailers now make around 19p a litre. This is shocking, especially when you think about their average margin prior to Covid which was 6p.
“The diesel profit is approximately 15p per litre and has an equivalent long-term average margin of petrol.
“Based upon the fact that major retailers get new stock every week, unleaded costs 12p and diesel 10p respectively.
Williams claimed that he expected retailers to resent RAC because they pointed out the fuel’s high price and called for Government intervention to stop major operators from taking advantage of this situation.
Williams stated that even if there is no substantial reduction in fuel prices, it would be worthy for government scrutiny.
“With record fuel prices, drivers need some relief at the pumps. It’s hard to attribute rising oil prices.
“It appears that retailers believe they can charge more fuel due to the general acceptance by the public of rising prices for energy.
MOTORING: SAVE MONEY
