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Motorists lose out as retailers refuse to cut petrol prices in October despite drop in wholesale cost

The price of petrol remained unchanged in October despite a drop in wholesale costs which should have been passed on to motorists at the pump.

RAC Fuel Watch data shows there was a 3.5p fall in the wholesale price yet unleaded started and finished the month at 130.6p a litre. This means the average cost of filling a 55-litre family car with petrol has stayed at £71.84 when it should have been nearly £2 less (£1.92) had retailers done the right thing and reflected the lower wholesale price on the forecourt.

Even though conditions were ripe for a petrol price cut from the middle of the month the big four supermarket fuel retailers – which play a vital role in setting the market for fuel prices across the UK – refused to lower the price for drivers. It was not until the end of the month that Asda finally reduced unleaded by an average of 2.4p across all its forecourts.

But this has sadly not led to other retailers following suit by lowering their prices and has therefore had little effect either on the average price of unleaded at the supermarkets, or on the UK average. The average price of petrol at Asda, Tesco, Sainsbury’s and Morrisons actually increased by 0.6p a litre in October (126.88p to 127.48p) despite the drop in the wholesale cost.

Diesel, however, suffered its fourth consecutive monthly price increase, rising by 2.38p from 134.50p to 136.88p, making the cost of a 55-litre tank £75.28. Buying it at a supermarket saves 3p a litre with the average price standing at 133.67p a litre at the end of October, having risen 2.35p from 131.32p.

Refilling with petrol at a motorway service area, however, now costs an average of 149.32p – a slight reduction of 0.3p a litre on the start of the month when it was 149.62p. Frighteningly, a litre of diesel at a motorway forecourt is an average of 155.22p – an increase of 2.7p in October. A tank of petrol is therefore £82.29 while diesel is an eye-watering £85.37.

RAC fuel spokesperson Simon Williams said:

“Every motorist driving a petrol car should feel aggrieved that the price of a litre stayed the same in October when it should have fallen by more than 3p. The biggest retailers who are responsible for selling the most fuel have taken drivers for a ride.

“In doing so they have inadvertently but categorically proved that ‘rocket and feather’ pricing does exist. Had wholesale costs increased at the same rate the supermarkets would have passed these on at the pump straightaway just as they did in April and May this year.

“Unfortunately, other retailers that don’t buy wholesale fuel as frequently are just as guilty as they have now had plenty of time to cut their prices. They were, more than likely, waiting for the supermarkets to lead the way, but this surely isn’t a valid excuse.

“So while there are times when fuel pricing in relation to wholesale prices does operate transparently, sadly October just wasn’t one of those months.

“We strongly urge all retailers to lower their petrol prices in line with the reduced wholesale cost of unleaded. And, with the pound gaining strength against the dollar on 1 November, there will be even greater scope for a cut.”

The lower wholesale price of petrol has been brought about by an 11% fall in the price of oil which has gone from $84.73 at the start of October to $75.55 at the close. Sterling – the other important factor in determining wholesale costs – lost 2% on the dollar, dropping from $1.30 to $1.27 in the month.

Regional fuel price variation

The North East had the cheapest petrol in the UK at the end of October at 129.25p a litre. The South East had the most expensive at 131.45p. It also had the dearest diesel at 137.72p. Northern Ireland had the lowest priced diesel at 135.55p. The North East, however, made up for having the lowest price petrol as it suffered the biggest diesel price increase at 2.71p taking a litre to 136.55p.

Regional average unleaded pump prices

Unleaded 01/10/2018 31/10/2018 Change
UK average 130.62 130.61 -0.01
Northern Ireland 129.65 129.33 -0.32
Wales 130.43 130.21 -0.22
North East 129.45 129.25 -0.20
London 131.05 130.92 -0.13
West Midlands 130.32 130.27 -0.05
North West 130.12 130.11 -0.01
South East 131.45 131.45 0.00
Yorkshire And The Humber 129.91 129.91 0.00
East 131.30 131.33 0.03
East Midlands 130.44 130.49 0.05
Scotland 130.20 130.27 0.07
South West 130.89 131.01 0.12

 

Regional average diesel pump prices

Diesel 01/10/2018 31/10/2018 Change
UK average 134.50 136.88 2.38
North East 133.84 136.55 2.71
Yorkshire And The Humber 133.44 136.01 2.57
London 134.85 137.34 2.49
East Midlands 134.36 136.83 2.47
Scotland 134.64 137.06 2.42
East 135.05 137.42 2.37
South East 135.36 137.72 2.36
North West 134.39 136.71 2.32
Wales 134.32 136.62 2.30
West Midlands 133.97 136.25 2.28
Northern Ireland 133.30 135.55 2.25
South West 134.76 136.96 2.20

 

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