RAC calls on fuel retailers to pass on wholesale price savings
Petrol and diesel pump prices predicted to ease
As UK petrol and diesel prices near record highs again – diesel has already topped the £1.50/litre in some towns – the RAC is calling for retailers to give motorists some good news by passing on savings from the drop in world wholesale fuel prices.
The wholesale prices of both petrol and diesel – which exclude VAT – have been on a general downward trend since 25th February. The normal two-week ‘lag’ between changes in wholesale prices and pump prices arising from the cheaper fuel working its way through the supply chain will shortly have elapsed so motorists should be seeing price reductions at the pump in the next few days.
The RAC is urging fuel retailers to make sure they pass on the saving at the pumps as quickly as possible to ease the financial burden on hard-hit motorists.
Standing at 112.25p per litre on Monday 18th February*, the wholesale price of unleaded has dropped to 108.97p, while diesel has fallen from 114.40p to 112.29p over the same period. Despite this, drivers have seen little to no change in prices on the forecourt. Instead, average pump prices appear to be swiftly heading towards the record April 2012 high of 142.48p for unleaded and 147.93p for diesel.
RAC technical director David Bizley says: “Motorists should expect to see a 3p and 4p a litre reduction in the price of petrol and diesel respectively if fuel retailers do the right thing and pass on their wholesale savings.”
The news comes as new research from the RAC** reveals that as many as 45% of drivers say they have had to cut out non-essential trips to save money. Even more worryingly, more than half (51%) of those surveyed admit they have had to cut back spending on essential items such as food and clothing just so they can keep the car filled up and on the road.
Not surprisingly, this has serious consequences on people’s everyday lives, with 54% saying the cost of fuel is adversely impacting on their social life, while 27% feel it is has affected their working life.
The vast majority of people in Britain are now seriously concerned by fuel prices, with 89% wanting to see further government intervention to help resolve the problem.
Only last autumn, the Office of Fair Trading (OFT) conducted a short study into the retail market for motor fuel and specifically, whether reductions in wholesale prices are reflected quickly enough in the prices at the pump or whether rises in wholesales prices lead to a far more rapid increase in prices at the pump.
The OFT disappointed consumer groups by claiming that they were unable to find evidence of uncompetitive behaviour and and recommending against a full enquiry. The RAC believes that pricing across the whole industry needs to be far more transparent in order to re-establish consumer confidence.
David Bizley adds: “While historically, many of the price rises at the pump have been as a result of increases in tax and duty, it is clear that the industry is not bringing prices down fast enough when wholesale prices drop. In the current economic climate, this is simply unjust.
“The current approach to fuel pricing and taxation seems particularly short-sighted when you consider the Office of National Statistics recently reported that petrol and diesel sales are down by 18% since 2007 and analysis of the ONS data by the RAC Foundation has highlighted the growing problem of fuel poverty.
“With so many people struggling day-to-day to make ends meet and being forced to cut back on the essential use of their motor vehicle, the fuel retailers and the Government should be doing more to help drivers.
“Independent research by the National Institute for Social and Economic Research and the Centre for Economic and Business Research has clearly demonstrated the link between between fuel prices, unemployment and economic shrinkage and therefore rising fuel prices have serious consequences for the recovery.
“There has never been a more expensive time to be a motorist and the RAC, alongside other supporters of thee FairFuelUK campaign, will continue to lobby the Government to raise awareness of the hardship faced by the UK’s motorists and ultimately drive down costs at the pumps.”
