Fuel prices drop, but drivers still overcharged, RAC analysis reveals
Updated: Jun 10
Fuel prices dipped slightly in May, yet drivers are not experiencing the full benefit of falling wholesale costs, according to RAC Fuel Watch.
The average price of unleaded petrol fell by 2.4p per litre, from 150.31p to 147.88p, translating to a saving of about £1.30 per tank. Supermarket reductions were smaller, at just 1.2p, dropping from 147.31p to 146.15p. Diesel saw a more significant decrease, with prices dropping by 4.5p per litre, from 158.06p to 153.58p. Again, supermarket reductions lagged, with prices falling by only 3.4p per litre, from 154.93p to 151.49p.
RAC data reveals that the gap between wholesale and retail prices remains substantial. Retailers are taking larger margins than historically normal, with petrol margins at 13p per litre and diesel at 16p, compared to the long-term average of 8p per litre.
Competition and Markets Authority (CMA) data, analysed by the RAC, shows that Asda is no longer the cheapest supermarket for fuel. Tesco, Morrisons, and Sainsbury's are undercutting Asda by 2.1p per litre for petrol and 2.5p per litre for diesel.
Northern Ireland continues to offer the lowest average fuel prices in the UK, with petrol at 141.4p per litre and diesel at 142.5p per litre. Some forecourts elsewhere also provide competitive prices, with petrol available under 139p per litre in County Durham and East Sussex, and diesel under 143p per litre in Scotland.
The RAC urges that the CMA’s enhanced powers be used to address unfair pricing, ensuring drivers benefit from the intended 5p per litre duty cut.
Rod Dennis, RAC Senior Policy Officer, said: “A month of decreasing fuel prices should be seen as a good one for drivers, but the sheer time it is taking for any meaningful price reductions to reach forecourts is if anything a continuing cause of concern. When it comes to much-needed pump price cuts, it’s sadly a case of too little, too leisurely, with most drivers still getting a miserable deal every time they fill up.
“We’re once again in classic ‘rocket and feather’ territory, with pump prices only trickling down when they should really be falling like a stone. What’s more, not only have wholesale prices been coming down consistently for over a month, but the average margins taken by retailers are still so much bigger than in the past. This means pump prices are at levels much higher than we ought to be seeing, which is all the more concerning given drivers are meant to still be benefiting from a 5p a litre duty cut introduced more than two years ago.
“It’s also interesting to see that Asda no longer holds the crown for selling the cheapest fuel, despite the pledge made when it was subject to a merger a year ago. The other three major supermarkets, as well as some enterprising independents, now offer lower prices. But with only a few exceptions, there doesn’t appear to be much in the way of price competition taking place.“
