RAC fresh call for larger retailers to cut fuel prices as oil falls to lowest price this year
A fall in the price of oil to the lowest level this year has increased pressure on the bigger retailers for a reduction in their pump prices, according to the RAC.
The RAC has said “something badly needs to change to give drivers a fairer deal.”
The call follows the publication of a Competition and Markets Authority (CMA) review which has found that UK fuel retailers have taken part in ‘rocket and feathering’ pricing throughout 2022.
This is when fuel prices rise as wholesale costs rise, but then fall more slowly than costs come down.
The CMA found evidence of rocket and feather pricing across all retailers in March and April 2022, in particular for diesel prices, the watchdog said in a report.
CMA Interim Chief Executive, Sarah Cardell said: “It has been a terrible year for drivers, with filling up a vehicle now a moment of dread for many.
“The question for the CMA is whether a lack of effective competition within the UK is making things worse.”
“Although it is only a small proportion of the overall price, the increase in margins for many fuel retailers over the last few years is something we need to investigate further. The key thing we need to establish next is whether this development is down to competition problems or not.”
Petrol and diesel prices hit a series of records over the summer after Russia’s invasion of Ukraine pushed up oil prices but according to the RAC, oil is at the lowest level this year.
RAC fuel spokesman Simon Williams said: “There is yet more pressure on the biggest fuel retailers today to pass on savings to drivers as the price of oil has dipped below $80 for the first time since the start of the year causing the wholesale cost of petrol to tumble to 105p a litre and diesel to 119p.
“If a cut of at least 10p a litre doesn’t come soon it will be yet more evidence of ‘rocket and feather’ pricing for the Competition and Markets Authority to take note of. ”
“The disparity between average pump prices at 158p for petrol and 182p for diesel and their wholesale equivalents is truly shocking.”
“Even taking account of major retailers’ buying cycles, we can see no justification for them not cutting their prices significantly.”
“This failure to reflect falling wholesale costs over multiple weeks at the pumps is totally unreasonable.”
“Whenever you have smaller, independent forecourts charging far less than the big four supermarkets, which buy far larger quantities of fuel on a far more frequent basis, it has to be a cause for major concern.”
“Something badly needs to change to give drivers a fairer deal at the pumps and everyone will be looking to the CMA to instigate this.”
“While our data shows there were clearly issues with ‘rocket and feather’ pricing before the pandemic, the situation is 10 times worse today.”
“What’s more, it really isn’t the case that volatility brought about by the war in Ukraine is to blame for what’s happening now as wholesale prices are now so much lower than they were nine weeks ago.”
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