Why Don’t Retailers Play Fair On Diesel?

While the wholesale price of diesel has now dropped below that of petrol, fuel station retailers refuse to drop their prices in line, and are cashing in on diesel drivers.

The average price of diesel at the pump has dropped the second most in a month, to 152.59p per litre. This is the second biggest drop in fuel prices in a month.

According to the most recent AA Fuel Price Report, the price drop from the middle of April to the middle of May could have been even bigger than in 2008 if the fuel trade hadn't kept the money they saved from bulk prices going down.

Since March 23, diesel has been cheaper than petrol at the wholesale level, and on May 17, it was more than 5p a litre cheaper.

When fuel tax and VAT are added to the price, the difference between petrol and diesel could be as much as 6p, which is 67.9p for petrol and 61.69p for diesel.

Earlier this month the Competition and Markets Authority (CMA) revealed that supermarkets and independent fuel retailers were keeping diesel prices artificially high by reflecting each other’s prices at a local level. Whereas supermarkets such as Tesco have previously helped drive down the price of fuel, they are now more in line with smaller operations.

Speaking about the issue, the AA’s fuel spokesman Luke Bosdet explained that the independents should do more to influence the market.

“Other retailers are not tied to supermarket prices and could charge less for their fuel. Instead, there has developed a localised cosy relationship between forecourts, where non-supermarket retailers peg their prices close to what a supermarket charges and vice versa.

“The maverick independents, minnows in comparison with the big non-supermarket chains, have shown what is possible with UK pump prices.

“If you’re lucky, you might find a competitive independent - usually on the outskirts of town. But too often you won’t as the majority follow the supermarkets’ lead.

“The only way out of this morass of uncompetitive fuel prices is pump price transparency – as the CMA recommended to the Government in October.”