Fuel retailers have countered allegations of overcharging motorists despite a recent rise in pump prices. According to data from the RAC released on Wednesday, diesel costs surged by 8p per litre last month to a new average of 163.1p. Petrol prices also experienced an increase of nearly 5p per litre, settling at 157p.
The RAC attributes the persistent price hikes to production reductions agreed upon by the Opec+ group of oil-producing nations. These cuts have triggered a rise in Brent crude oil costs since July, with a barrel priced around $72 at that time. Over the past weeks, the cost has been edging towards $100 and is currently valued at $90. This inflation is exerting more pressure on the cost of living as these additional bills contribute to the ongoing financial crisis.
Another factor influencing higher fuel pump bills is the weakened pound against the US dollar, as oil prices are dollar-denominated. The RAC has accused retailers of overcharging petrol customers following incidents last year where supermarkets were chastised by competition regulators for their pricing strategies and were consequently obliged to support a fuel price transparency mechanism.
RAC fuel spokesperson Simon Williams commented: “Our analysis of RAC Fuel Watch wholesale and retail data indicates that petrol is overpriced by about 7p per litre, although diesel prices are expected to rise further in weeks to come.” He expressed concern that retailer margins across the UK were higher for petrol than warranted considering major supermarkets were reprimanded by the Competition and Markets Authority for overcharging drivers by £900m in 2022.
However, these findings have been refuted by the Petrol Retailers Association (PRA), which represents independent forecourts as well as non-supermarket retailers and holds nearly two-thirds of the fuel market share. PRA’s Executive Director Gordon Balmer defended his members, stating: “Our members are not unjustifiably pricing petrol higher than necessary. Fuel margins have been under strain due to increased operational costs our members have had to shoulder.”
Balmer explained that the rise in labour expenses, energy costs, record inflation rates and decreased fuel sales have naturally led to increased margins. He criticized attempts to incite public outrage by suggesting otherwise as “deeply irresponsible”. Balmer reassured that the PRA remains committed to supporting its members and fostering transparency within the sector, and is open to engaging with a mediator for an informed discussion on these crucial issues.