Petrol prices higher than they should be, says RAC

According to the RAC, British motorists are facing petrol and diesel prices that are “much higher than they should be”.

The motoring group said fuel retailers were using the “distraction” of the general election to keep profit margins “remaining high”.

He called on the UK competition body to bring retailers “in line as quickly as possible”.

However, a body representing fuel retailers said businesses were facing higher costs and also needed to invest in new technology for electric vehicles.

Concerns about the high price of fuel prompted the competition regulator, the Competition and Markets Authority (CMA), to look into the sector last year and concluded that some retailers were overcharging.

In March of this year, CMA looked again at prices and said the steady rise in the level of fuel profit margins was “disturbing”.

The RAC, which has long campaigned on fuel costs, says pump prices have remained high despite wholesale costs falling since the end of April.

The average price of a liter of petrol is 146.3p, which is said to be 5p higher than it should be, the equivalent price in Northern Ireland is 141.1p.

The group also said the UK has seen the most expensive oil prices in Europe for the past seven weeks, with an average liter costing 151.5p.

The average profit margin per liter for retailers is currently 14p for petrol and 16p for diesel, RAC data found, which it said looked “excessively high” given long-term margins for both fuels are 8p per liter.

RAC head of policy Simon Williams said: “While there has been a lot of focus on fuel since the Competition and Markets Authority concluded that the biggest retailers had overcharged motorists by £900m by 2022, margins are once again holding steady high – and drivers are paying the price.

“Our data clearly shows that pump prices have not fallen in line with lower wholesale prices, so motorists across the UK – with the exception of those in Northern Ireland where fairer prices are charged – are lose a few pounds again every time they fill up.”

But the Petrol Retailers Association (PRA) said comparing current fuel margins with historical figures ignores “several critical factors”.

“We need to consider the significant increase in operating costs, reduced fuel volumes following the pandemic and the substantial investment required to transition to a low-carbon transport system,” said Gordon Balmer, executive director of the PRA.

“These factors mean that fuel retailers need to earn more from fuel sales to stay in business and invest in the future.”

He added that yards are “ideally suited” to electric vehicle charging points and many PRA members were investing in them “despite slower than expected uptake of electric vehicles and long payback periods for such investments “.