Fuel prices drop 7p in September – but “should be 10p lower”
The price of fuel hit record highs of 191.53p per litre in July
RAC claims supermarkets are holding back profits on cost of fuel following summer’s record highs
The price of fuel should be 10p lower than it currently stands, despite an average drop of 7p across UK forecourts in September, the RAC has claimed.
However, the British Retail Consortium, which represents the major supermarkets – such as Asda and Tesco – has argued that reductions are being passed on “as they feed through the supply chain”, despite claims that retailers are making more than they would normally following the summer’s record high prices, which were driven by high demand and low supply.
Prices currently stand at an average of 162.89p per litre for petrol and 180.16p for diesel. This means filling up a 55-litre family car, such as a BMW 3 Series or Volkswagen Golf, costs £89.59 - almost £16 lower than July’s peak of £105.34 (191.53p per litre). The same tank of diesel stands at £99.09 – £10.41 less than July.
RAC spokesman Simon Williams said that these prices should be lower, at around 152p per litre for petrol, due to wholesale oil dropping from $130 a barrel in mid-June (£113.78 in current exchange rates) to $87.96 (£76.99) in September.
“Drivers really should have seen a far bigger drop as the wholesale price of delivered petrol [per litre] was around 120p for the whole month,” said Williams. “This means forecourts across the country should have been displaying prices around 152p given the long-term margin on unleaded is 7p a litre.
“The average price of petrol at the big four supermarkets is only 1.5p lower than the UK average – less than half what it usually is, which points heavily to them not playing fair with drivers.”
In response, Andrew Opie, director of food and sustainability at the British Retail Consortium, said: “Retailers understand the cost pressures facing motorists and will do everything they can to continue to offer the best value for money across their forecourts, passing on cost reductions as they feed through the supply chain.”
Despite this, the drop during September, which fell by 6.69p on average for petrol, was the sixth biggest across a month since 2000.
Across the UK, forecourts in England's north-east recorded the biggest decrease (8.24p), followed by London (7.91p) and the West Midlands (7.03p). The lowest drop was recorded in the East Midlands (5.93p), which leaves the region with the highest overall prices, at 164.14p per litre. The lowest in the UK is currently offered in Northern Ireland, at 159.28p per litre.
Williams added that prices should be dipping further in the coming weeks and months. He said: “Despite the plunge in the value of the pound, the fact oil is trading under $90 a barrel should lead to better prices at the pumps if only more retailers would pass on the savings they’re currently getting every time they buy new stock.”