According to Martin Lewis, the issue of rising energy costs is “a national crisis” comparable to the Covid pandemic. The…
According to the RAC, supermarkets are not slashing fuel prices as much as they ought to in order to match the ‘significant’ decrease in the price of petrol at wholesale.
The motorist organisation claimed that the difference between wholesale pricing and pump prices was at its largest point in over a decade.
Tuesday’s gasoline costs roughly £1.76 per litre, but according to RAC researchers, it should have cost about £1.62.
Despite reaching record highs this year, fuel costs gradually decline.
According to the RAC, the leading four supermarkets – Tesco, Asda, Sainsbury’s, and Morrisons – charged an average of £174.4 per litre for gasoline at the beginning of the week. Fuel cost £1.86.
The average delivered wholesale price of gasoline last week was £1.24, while the cost of diesel was £1.38.
The RAC stated that ‘forecourts should soon be selling unleaded for no more than £1.62’ after accounting for VAT, fuel duty, and a ‘generous’ retailer margin of 10p per litre.
RAC’s fuel spokesman Simon Williams said, ‘There appears to have been a big shift in the last few months in the behaviour of the four major supermarkets, which dominate UK fuel retailing, as they are now commonly being undercut by independent retailers that are passing on the wholesale cost savings they’re benefitting from to drivers at the pumps.’
‘This is unheard of as the supermarkets are normally at least 3p a litre cheaper than the UK average.’
Because they purchase fuel more frequently than individual retailers, supermarkets are typically less expensive because they can respond rapidly when wholesale prices change.
That is ‘often demonstrated by the speed at which they pass on increases on their forecourts when wholesale prices rise,’ according to Mr WilliaMs
He added that ‘as the supermarkets account for so much of all the fuel sold across the country and they haven’t lowered their prices as much as they should have, it means average UK prices have not come down in line with the significant drop in wholesale fuel.’
Since the RAC began keeping track of them in 2013, the difference between wholesale and retail prices, excluding VAT, has never been wider.
The RAC said that the present price differential was greater than the one at the beginning of the epidemic when the nation was put on lockdown, the price of oil dropped to roughly $13 per barrel, and the country was placed under lockdown. In recent months, the cost of oil has persistently hovered around $100 per barrel.
Before the conflict in Ukraine broke out in February, fuel costs were already rising, but the consequences of Russia’s invasion have made matters worse.
One of the largest oil exporters in the world, Russia is currently under sanctions because of its actions in Ukraine. As a result, demand for oil from other producers has increased, pushing up prices.
Even though the UK only imports 6% of its crude oil from Russia, it is nonetheless impacted when the price of oil increases globally.
Prices for gasoline and diesel typically fluctuate with changes in the price of crude oil.
The average family car now costs more than £100 to fill up, according to data from the RAC released in mid-June, which showed that gasoline prices set new monthly records every day.