Cut the price of fuel, says RAC

• RAC calls for fuel retailers to cut prices
• It says falling oil prices not being passed on to drivers
• RAC say fuel duty cut will be reversed in the autumn
• The average price of fuel should be 136p not the current 142p
• UK has highest diesel price in Europe
• Retailers say fuel prices are as low as possible

The RAC has called on fuel retailers to urgently cut fuel prices to pass on lower wholesale costs to drivers. While the price of oil has been falling since July, petrol and diesel pump prices remain stubbornly high.

The RAC says retailers are pocketing the profits rather than passing on the saving to consumers. To make matters worse for car drivers, the motoring organisation believes the temporary 5p cut in fuel duty will be reversed in the upcoming Budget.

According to the RAC Fuel Watch, the delivered wholesale price of petrol averaged 103p per litre last week. Even allowing for a retailer profit of 10p per litre, which is 2p more than the long-term average, the RAC believes pump prices should be around 136p including VAT. Instead, the average price is 142p.

The RAC has also done its sums with diesel pump prices and reckons a 139p pump price would still leave retailers pocketing a healthy 10p per litre in profit. Instead, the average cost is 147p.

Check the prices of the most affordable petrol or diesel at petrol stations near your current location or chosen address.

RAC head of policy Simon Williams said: “The biggest retailers’ refusal not to reduce their prices to fairer levels is continuing to cost drivers dear. Our analysis shows pump prices at a majority of forecourts should be cut by around 6p for both petrol and diesel. With wholesale prices down, drivers should not be seeing forecourt prices this high.”

The RAC’s research echoes work done by the Competition and Markets Authority (CMA), which found that fuel retailers have overcharged customers by £1.6 billion in 2023. Further research by the RAC shows that the UK has had the dubious honour of having the most expensive diesel in Europe for the last 16 out of 17 weeks.

Retailers say fuel prices are as low as possible

Any suggestion of profiteering is denied by the Petrol Retailers’ Association (PRA): “Retailers are working hard to keep fuel prices as low as possible in a fiercely competitive market,” said the PRA’s executive director, Gordon Balmer. “For background, the PRA has been transparent with the Government on this issue and has offered to meet with the RAC, but this offer has not yet been accepted.”

There’s more bad news for car drivers as the RAC believes the temporary 5p cut in fuel duty, introduced in 2022, will be reversed in October’s Budget, the first of the new Labour government. This Wednesday, Prime Minister Sir Keir Starmer refused to rule out a rise in fuel duty and warned the public to expect a “painful” Budget.

The PRA has urged the Government to keep fuel duty at its current level. “Any government-driven increases at the pump would raise costs for both businesses and motorists, further fuelling inflation.”

However, the RAC believes the petrol retailers should take responsibility for high prices rather than pointing the figure at possible changes in fuel duty. “If prices don’t fall dramatically in the next week or so, we believe the Government and the CMA should get all the biggest retailers together to demand an explanation,” said Williams.

“Tough action needs to be taken to change this as drivers are losing out badly every time they fill up. Artificially high pump prices also contribute to a higher level of inflation – so if prices were nearer where they should be, inflation would be lower, benefitting borrowers and the wider economy.”

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