Fuel retailers must cut petrol by 12p a litre THIS WEEK, demands the RAC, as Omicron Covid variant fears trims $10 off a barrel of oil
- Oil fell by $10 a barrel to $73.18 on Friday following news of the Omicron variant
- Wholesale price of petrol and diesel was already 5.6p lower a week before then
- RAC says the combination means retailers are overcharging motorists by 12p per litre for petrol and 10p for diesel
- It called on government to intervene to force major retailers to cut pump prices
Motoring groups have demanded that fuel retailers cut the price of petrol and diesel this week, as $10 has been shaved from the cost of oil in recent days.
RAC Fuel Watch data shows the price of oil fell by $10 a barrel to $73.18 on Friday as concerns over demand grew following the news of the outbreak of the Omicron Covid variant.
The falling cost of oil, on top of already lower wholesale prices of petrol and diesel for over a week, means unleaded is currently 12p-a-litre more expensive than it should be while diesel is 10p too high, according to its figures.
Drivers are being forced to overpay for petrol by 12p-a-litre: The RAC has called on retailers to slash the price of fuel this week having seen wholesale costs and oil fall in the last week
The motoring body said retailers must significantly cut their pump prices this week or ‘risk losing all credibility with drivers’.
According to latest fuel prices, unleaded is currently at an average of 147.64p-a-litre and diesel is 150.85p.
However, had the biggest retailers been reflecting the downward movement in the wholesale market, they should really be 135p and 141p respectively.
The latest call for pump prices to be slashed comes as motorists enter a fifth week or record high fuel costs.
Both petrol and diesel eclipsed previous record highs before the end of October and have no dipped back below that level 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.
If the price of petrol and diesel was to fall by 12p and 10p per litre, respectively, both would drop well below the previous record high set in April 2012 (142.48p for petrol and 147.93p for diesel).
Just days ago, fuel price analysts pointed out that the wholesale price of fuel had dropped by 5.6p-a-litre a week earlier, yet these cost savings had not been passed onto the nation’s 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 accused retailers of living up to the worst ‘rocket and feather’ behaviour by resisting reducing their pump prices in stark contrast to what they do when wholesale prices go up – which is to pass on increases daily.
If the price of petrol and diesel was to fall by 12p and 10p per litre respectively, both would drop well below the previous record set in 2012 and end 5 weeks of sky-high costs for drivers
Fuel spokesman Simon Williams said: ‘Ten days ago we highlighted that petrol was 6p too expensive due to a fall in the wholesale price.
‘Sadly, the biggest retailers, who lead the market, have stood strong and taken advantage of their customers by collecting bigger profits on every litre they sell than they traditionally do.
‘On Friday news of the Omicron Covid variant caused $10 to be shaved off the oil price leading to a further drop in the wholesale price of fuel.
We estimate that retailers are now making around 19p-a-litre, which is shocking when you consider their average margin pre-Covid was 6p
‘We estimate that retailers are now making around 19p-a-litre, which is shocking when you consider their average margin pre-Covid was 6p.
‘The profit on diesel is around 15p-a-litre with a similar long-term average margin to petrol.
‘Based on the fact the biggest retailers buy new supply every week we believe unleaded is 12p too expensive and diesel about 10p too dear.’
Williams said he fully expects retailers to resent the RAC for pointing out that their fuel is overpriced and called on the Government to intervene to force the hand of major operators.
‘If a substantial cut doesn’t materialise, we feel this is worthy of government scrutiny as there’s no public body monitoring fuel prices to see if they’re fair,’ Mr Williams added.
‘With fuel prices at record highs drivers are in dire need of some respite at the pumps and now it’s impossible to blame the prices on rising oil costs.
‘It seems as though retailers think they can get away with charging more for fuel because of the public’s general acceptance of rising energy prices.’
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