Drivers hit by retailers making ‘unfairly high margins’ on fuel, minister warns

Drivers are suffering from “unfairly high margins” on fuel sales, a minister has warned.

The Competition and Markets Authority (CMA) must be given the power to take “meaningful action” against companies overcharging for petrol and diesel, according to a letter from the RAC to the Secretary of State. Energy Claire Coutinho.

The average retailer margin – the difference between the amount they pay for fuel and the price at the pump – has been above 18p per liter for diesel since May 7 and is close to 12p per liter for essence, wrote RAC policy manager Simon Williams.

The long term average for both fuels is 8p.

Margins have increased in recent days due to reductions in wholesale costs due to lower oil prices.

The RAC estimates that if retailers charged “fairer” margins, the average price of a liter of petrol and diesel would be around 145p, down from current prices of 150p per liter for petrol and 157 pence per liter for diesel.

Mr Williams wrote: “The RAC recognizes that retailers, along with all businesses, have been affected by high levels of inflation, but we believe the current margins are extremely unfair to drivers who are struggling to afford s to get out of the cost of living crisis.

“Furthermore, after tracking fuel prices against the Consumer Price Index, we can see that there is a clear link between the two, meaning that unfairly high margins make inflation more higher than it should be. »

He continues: “Even though so much data on fuel prices has never been made public, the problem of excessively high margins from retailers persists.

“The RAC believes that this will only improve if the CMA, as a price watchdog, is able to take meaningful action against retailers whose margins appear unreasonable when compared to the wholesale price of the fuel.”

Fourteen of the largest fuel retailers voluntarily share their daily pricing data through a CMA program.

The government has proposed a mandatory Pump Watch fuel price transparency program.

A Department for Energy Security and Net Zero spokesperson said: “The Energy Secretary has made clear that retailers who fail to pass on savings to drivers at the pump will be held accountable.

“We are already giving the CMA tough new powers to force retailers to confess their prices and report any scams.

“Drivers deserve to know they are getting a fair price for fuel and our PumpWatch program will do just that, helping them find the best deal.”

Gordon Balmer, executive director of the Petrol Retailers’ Association, which represents independent fuel sellers, said: “Petrol retailers continue to offer motorists the best possible deals while battling skyrocketing increases in their fixed costs .

“Retailers are facing record levels of theft as well as increases in business rates, energy bills and the national minimum wage.

“Our members are committed to keeping pump prices as low as possible for their customers, but they are not immune to the impact of geopolitical events beyond their control.

“We have worked closely with the government to develop its fuel price transparency system, which will help motorists find the cheapest fuel available in their area. »