RAC: Fuel prices fall for fifth straight month, but diesel still seriously overpriced

Fuel prices have dropped for the fifth consecutive month in March, with petrol decreasing by 1p and diesel by 4p, according to RAC Fuel Watch data.

By the end of March, unleaded petrol was priced at 146.5p per litre, the lowest since January 2022, and diesel fell to 162.94p, its cheapest since early March last year.

Despite the reduction, RAC data reveals diesel prices should have decreased further as its wholesale price was similar to petrol’s for most of March.

Diesel even became cheaper than petrol on the wholesale market from 23 March.

However, the average retailer margin on a litre of diesel in March was 21p, three times the long-term average of 7p, while the margin on petrol was only 7p.

RAC fuel spokesman Simon Williams noted, “The situation in Northern Ireland shows just how much diesel should really be being sold for.”

Diesel prices in Northern Ireland are 10p cheaper at 152.78p per litre, with petrol at 143.97p.

Several factors contribute to lower fuel prices in Northern Ireland, including a higher retailer-to-car ratio, more fuel distributors, cheaper fuel across the border, and a lower market share of big four supermarkets (28% compared to 43% in the UK).

The average prices for unleaded petrol at the big four supermarkets decreased by 1.5p to 143.18p in March, while diesel dropped by 5.3p to 159.88p.

Costco offers the most competitively priced fuel across the UK, with petrol at 137.7p and diesel at 149.8p.

Williams stated, “It simply cannot be fair on drivers that the retailer margin on diesel is currently three times more than the long-term average at 21p a litre.” The RAC is urging the Competition and Markets Authority to pay close attention to the issue, as retailers selling the most fuel should reflect the wholesale market changes more closely.