Motorists are not benefiting from the oil price crash because petrol suppliers are ‘dishonestly holding back’ from passing on savings at the pumps, campaigners said today.
FairFuelUK founder Howard Cox said average prices of a litre of unleaded and diesel should be 98p and 106p respectively.
But they are instead 110.05p and 115.13p, according to the RAC Fuel Watch data accurate to 19 April, around 12p and 9p more expensive than they should be.
It comes after the price of oil plummeted into the negative for the first time in history on Monday due to a collapse in demand triggered by the coronavirus pandemic.
Retailers’ argument is that with fewer vehicles on the road due to lockdowns they still have fuel purchased weeks ago at higher prices.
‘Rip-off levels’: Campaigners and petrol price experts have pointed fingers at fuel retailers for not passing on savings to motorists in the last month
But FairFuelUK blasted the industry for holding back on motorists and not passed on the savings drivers should be entitled to.
Mr Cox said: ‘Even with 70 per cent less fuel being sold, the dishonesty from these faceless businesses, using the coronavirus crisis as a smokescreen to maintain their profits, beggars belief.
‘It’s time the Government really looked after the highest taxed drivers in the world and our vital haulage industry, and introduce PumpWatch as a matter of emergency.
‘An independent pricing watchdog is vital to protect our economy and allow essential workers to fill up their vehicles with the fairest and most honest prices at the pumps.’
A review of March fuel prices by the AA revealed retailers had been doubling their profit margins by not passing on savings to motorists.
Since the middle of March and mid-April, the average pump price of petrol has fallen 11p-a-litre.
Taking average UK petrol pump prices over the past year and stripping out the tax and wholesale cost (backdated two weeks to allow changes to reach the pumps fully) leaves a supplier/retailer margin that tracks like this – the dates are in order of most recent first
The AA said while this would normally be a cause for celebration among drivers, it reflects less than 60 per cent of the savings that should have been passed on.
Average petrol pump prices have fallen from 121.28p a litre in mid-March to 110.40p last week, while diesel dropped 8.36p in the same period, from 124p to 115.64p.
At the same time, the wholesale price of petrol has stalled at around 16p-a-litre for the past three weeks.
Even including fuel duty (57.95p per litre) and VAT of 20 per cent, the AA said the price of petrol should have already dropped below £1-a-litre, had retailers not taken generous profit margins.
Howard Cox from FairFuelUK said the UK’s fuel supply chain had ‘dishonestly held back’ falls in wholesale costs which took place last month
A statement from the motoring group said: ‘Once the lockdown is over, the coronavirus beaten, and the UK has returned to normal, questions will have to be asked as to why some forecourts did not charge a fair price for petrol?
‘And why a tank of petrol in one of the most rural parts of the UK averaged £3.50 cheaper than in the most populous region?’
It went on to blast fuel businesses for not passing on the savings at a time when the country needs them most.
Luke Bosdet, the AA’s fuel price spokesman, said: ‘Those representing the retailers say that pump prices need to stay high in the lockdown to compensate for lower sales volumes and avoid forecourt closures.
‘We can only hope that, in the same way the AA has rescued free of charge 1,500 NHS workers whose cars have broken down during the coronavirus crisis and other motoring businesses have supported the emergency services either gratis or at cost, some forecourt owners with over-priced fuel offered a discount to those working to protect them.’
While the AA was critical of retailers, fellow motoring group the RAC took a more understanding approach to the situation.
Simon Williams, the fuel spokesman for the organisation, said: ‘It’s right that retailers charge a fair price for fuel that reflects the price of the raw product, and in theory petrol prices could fall below £1 per litre if the lower wholesale costs were reflected at the pumps – but at the same time people are driving very few miles so they’re selling vastly lower quantities of petrol and diesel at the moment. This means many will be at pains to trim their prices any further.
He also said cutting prices could see hundreds of independent businesses closing down, as hinted weeks ago by the Petrol Retailer Association.
Mr Williams added: ‘We also continue to be concerned about smaller forecourts that provide a vital service in areas where the supermarkets don’t have a foothold as many are already finding conditions tough with sales having fallen off a cliff since lockdown.
‘It would be bad news all round if these forecourts shut up shop for good.’
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