Inflated diesel prices hit small business owners as retailers refuse to pass on lower costs

Diesel drivers, including small business owners who rely on diesel-powered vans, are still being hit by inflated fuel prices at petrol stations according to the RAC.

Despite plummeting crude oil and wholesale diesel costs, major retailers are refusing to cut pump prices, leaving drivers paying nearly 19p more for every litre of diesel than they would have done two years ago.

This is despite Chancellor Jeremy Hunt continuing the fuel duty freeze in last week’s Budget.

Retailers’ profit margins are currently at nearly double what they took in 2021 and 2022, and almost three times as much as they did at the start of last year before duty was cut.

While petrol and diesel duty remain frozen until at least spring 2024, the 5p duty cut implemented in March 2022 is being gobbled up by retailers taking more margin than they normally do.

RAC Fuel Watch figures show that although wholesale prices have come down 10p in the last four weeks, this has resulted in just a 3p cut at the pumps. The gap between the wholesale cost of petrol and diesel has been narrowing for many weeks and is currently just over 1.5p. However, the difference drivers pay at the pumps remains high at around 19p per litre.

RAC fuel spokesman Simon Williams said: “At a time when so many households are struggling with the rising cost of living, we’re pleased the Chancellor did the right thing for drivers and kept fuel duty low in Wednesday’s Budget.”

“Unfortunately though, the pricing tactics of major retailers mean that diesel drivers in particular – including those who work for millions of small businesses – are still getting a really miserable deal at the pumps, and effectively aren’t seeing any benefit from the 5p duty cut whatsoever – as retailers are taking nearly four times this amount in margin with every litre they sell. So, in a peculiar way, it feels like it’s retailers who are benefiting from the lower duty cut right now, and not motorists.”

“Drivers and small businesses have every right to feel aggrieved.”

“We’re in a ridiculous situation where it would take just one major retailer to do the right thing and cut diesel prices to more sensible levels for a ripple effect to take place across the country’s forecourts, benefiting hard-up households everywhere. Instead, no retailer wants to blink first, with the result being millions of drivers forking out far more when they fill up than they should.”

“Two weeks ago, we pointed to how easy it was for retailers to slash diesel prices given how low the wholesale price had fallen.”

“It’s a sad reality that prices have merely trickled down by only around a penny since then. ”

“We now hope at least one major retailer finally decides the time is right to cut the prices to more reasonable levels, which will surely mean others follow.”

“If this doesn’t happen, the best drivers can do is shop around and try to find a forecourt that’s charging less than the RAC Fuel Watch average.”