December petrol fuel prices DECREASE 6p providing welcome relief to motorists

UK motorists received a welcome respite in December as fuel prices witnessed a notable decline, according to the latest data from RAC Fuel Watch.

The average price of petrol across the UK decreased by 6p per litre, dropping from 146.69p to 140.58p. This marks the second consecutive month of falling fuel prices, bringing much-needed relief to drivers.

The decrease means that filling a standard 55-litre tank now costs £77.32, a saving of £3.40 compared to the previous month. Diesel prices also saw a reduction, falling by 5p to 149.18p per litre. This brings the cost of a full diesel tank to £82.05, saving drivers nearly £3 (£2.86) per fill-up.

Notably, the price of unleaded petrol has returned to levels last seen in early February 2022, just before the Russian invasion of Ukraine caused oil prices to surge to around $130 per barrel. The current price of oil has now fallen to under $80 per barrel.

Despite these reductions, the RAC believes that fuel prices at the nation’s forecourts could be lower. They argue that this is particularly true if the big four supermarkets were to take fairer, smaller margins on fuel. In December, the average supermarket margin on a litre of fuel was reported to be 13p, which is more than double the amount taken in 2021.

Interestingly, fuel prices in Northern Ireland are significantly lower than the UK average, with petrol priced at 135.28p and diesel at 144.2p, both 5p cheaper. These prices are also lower than those charged by the big four supermarkets in the UK, where the average prices are 137.63p for petrol and 145.89p for diesel.

In a striking example of competitive pricing, the myRAC app's fuel finder feature highlights the independently run Grindley Brook forecourt in Whitchurch, Shropshire. This station is notably undercutting supermarket prices, charging just 130.9p for petrol and 139.9p for diesel. These prices are significantly lower than the supermarket averages, by 7p for petrol and 6p for diesel.

This overall decrease in fuel prices across the UK is a welcome development for drivers, especially in the context of the economic challenges and high fuel costs experienced over the past year. However, the RAC’s analysis suggests there is still room for further price reductions, particularly by larger supermarket chains.

RAC fuel spokesman Simon Williams said: “It’s clearly good news that both petrol and diesel came down substantially in December. While we’re starting the year paying much less at the pumps than we have done, it’s still galling to know that drivers aren’t being charged a fair price in comparison to Northern Ireland where the very same petrol and diesel is at least 5p a litre cheaper.

“It’s surely impossible to argue that competition is working properly if prices are so vastly different in two parts of the UK. And if an independent retailer in the middle of Shropshire can be undercutting the supermarkets by around 6p a litre, something has to be very badly wrong.

“We continue to call on the biggest retailers to play fair with drivers and lower their prices to match what’s being charged in Northern Ireland.

“We also urge Energy Security Secretary Claire Coutinho, who is on a mission to bring greater transparency to fuel pricing following the Competition and Markets Authority’s investigation concluding drivers were overcharged to the tune of £900m in 2022, to ask the supermarkets why they won’t charge similar prices to the averages seen across Northern Ireland.”

RAC Fuel Watch data also shows that the delivered wholesale price of petrol is 104p. This means even with a margin of 10p a litre – 3p higher than the long-term margin of 7p –unleaded should be on sale for an average of 137p, instead of 140.6p as it is currently.

The RAC estimates that the supermarkets could easily be charging around 132p, not their current 137.63p.

Simon Williams added: “In spite of the current overcharging, we strongly hope that 2024 will be the year when drivers finally get to see fairer pump prices.”