Retailers ‘not doing enough’ to pass fuel savings on to drivers

Retailers ‘not doing enough’ to pass fuel savings on to drivers
Retailers ‘not doing enough’ to pass fuel savings on to drivers

The price of fuel fell across the UK in June after four months of rises but retailers have been accused of not doing enough to help drivers.

The average cost of a litre of petrol dropped 3p and nearly 5p was cut from a litre of diesel but industry observers say retailers could have gone further.

With the wholesale cost of oil falling, retailers began to pass on savings last month, with the major supermarkets twice cutting forecourt prices significantly.

Read more: Petrol postcode lottery – the most and least affordable fuel across the UK

The average price of unleaded dropped from 130.67p to 127.62p while diesel fell from 135.51p to 130.90p, according to RAC Fuel Watch data.

Substantial decrease

However the organisation’s fuel spokesman Simon Williams said drivers were missing out on savings of up to 4p per litre as forecourt price changes didn’t accurately reflect the wholesale market.

Asda petrol station
Supermarkets’ diesel price cuts were nearly 2p per litre above the national average but their petrol cuts were slightly below. (Picture: Shutterstock)

He commented: “It’s great to see pump prices falling for the first time since January, but the reductions should have been greater based on the substantial decrease in the wholesale price.

“Retailers were clearly banking on the oil price rebounding after its sudden drop which began at the end of May when a barrel was over $70. Inevitably this has meant bad news for drivers who have lost out, with pump prices being 4p a litre more expensive than they should have been.

“Unfortunately, retailers’ hunch that oil would quickly increase again were right and now their prices are broadly where they should be based on the current wholesale price. They just happen to have made significant profits as a result of not passing on more of the savings to drivers than they did.”

Another drop unlikely

While June brought price drops, Mr Williams warned that drivers would be lucky to avoid further rises in July as the wholesale price of oil rose again.

He added: “It’s hard to see another drop materialising with OPEC and its partners extending their production cut until March 2020. On top of that there is also talk of a trade deal being struck between the United States and China allaying fears of a global economic slowdown which may have led to lower oil prices and in turn cheaper prices at the pump.

“If we get through July without petrol and diesel going up it will be a good result for drivers.”

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