Proactive Investors - Shell PLC, BP PLC and other UK petrol station owners are failing to reduce fuel prices at the same rate that wholesale prices fall, new research from RAC has again found.
The roadside cost of petrol and diesel decreased by 8p and 9p respectively in December, the roadside insurer found.
A litre of petrol cost an average of 151.06p and diesel 173.97p.
However, RAC noted that wholesale fuel prices have "fallen considerably" since mid-October, and even after allowing for a 10p-a-litre retailer margin (3p more than the long-term average) said petrol should be being sold for 140p and diesel nearer 160p a litre.
This means petrol is being sold for 11p and diesel 14p higher than wholesale prices, according to the calculations.
“On the face of it, December looks like it was a good month for drivers with 9p coming off at the pumps on top of November’s 6p, but there’s no question that the drop should have been far bigger given how far wholesale prices have come down,” said Simon Williams, a RAC fuel spokesperson.
“For weeks we’ve been calling on the big four supermarkets to cut their prices more substantially to give drivers a fairer deal when they fill up, so even though they have reduced their prices collectively by more than 10p a litre in December, they are still nowhere near where they should be given the scale of the drop in wholesale prices.”
He pointed out that prices in Northern Ireland were 7p cheaper there than the UK average at the end of the month and 9.5p lower for diesel, which “must mean something is very wrong with fuel retailing in mainland UK”.
As part of a probe by the Competition and Markets Authority last year ‘rocket and feather’ price hikes by petrol stations were identified, where prices go 'up like a rocket' and fall more slowly like a feather'.
The investigation continues and so far, no company has received penalisation.
Just before Christmas, business secretary Grant Shapps told fuel retailers that explanations were needed for their fuel pricing, saying the government “will not hesitate to act to ensure competition is healthy and consumers get a fair deal on their fuel”.
The RAC said it hoped this would put “more pressure on larger retailers to do the right thing”.