Petrol retailers fleecing drivers with ‘usual’ tactic

Fuel retailers are still using the ‘same old’ feather and rocket tactic to fleece Britain’s drivers at the pumps, despite ongoing efforts to clampdown on the practice, the AA says.

In recent days, petrol stations have employed ‘rocket and feather’ pricing, meaning they are not passing on lower wholesale costs anywhere near as quickly as they hike pump prices when they go up.

This is despite the Government trying to iron out details of a new policy to make it mandatory for fuel businesses to be transparent about their petrol and diesel prices.

This week has seen the first decline in average fuel prices since the beginning of the year.

While the decrease in cost of a litre of petrol and diesel feels long overdue, what motorists are paying at the pumps is still much higher than it should be, the AA believes. 

Since mid-April – over a month ago – the wholesale cost of petrol has dropped by around 4p a litre.

Yet, in the last 10 days, the average cost of unleaded across the UK is down just a penny, with retailers pocketing the difference.

‘Additionally, the premium on diesel, averaging at the pump around 7p a litre more than petrol when wholesale values are almost neck-and-neck, once again needs explaining,’ the AA explained.

This isn’t just stinging the wallets and purses of the nation’s drivers but is also ‘putting a significant drag on efforts to reduce inflation’, the motoring organisation adds.

The hope is that the introduction of a ‘PumpWatch’ scheme will shine a spotlight on fuel businesses overcharging at forecourts and pocketing higher margins.

It would see all filling stations across the UK legally required to share real-time price information within half an hour of increasing or lowering them.

Analysis of fuel pricing finds the average retailer profit margin – the difference between the amount they pay for fuel and the price they charge at forecourts – is currently nearly 18p per litre for diesel and almost 14p per litre for petrol. 

In the decade leading up to the Covid pandemic, the average profit margin on both fuels was around just 8p.

It means the combination of fairer pricing and companies cutting inflated margins would save drivers of petrol cars around 8p a litre at the pumps. 

In a letter sent to Energy Secretary Claire Coutinho last week, the RAC said the competition watchdog must be given the power to take ‘meaningful action’ against fuel companies overcharging driver for petrol and diesel.

Today, fourteen of the biggest fuel retailers are currently voluntarily sharing daily price data through the Competition and Markets Authority’s (CMA) scheme.

However, ministers are said to be ironing out finer details to make this mandatory across the entire retailer network.

Luke Bosdet, the AA’s spokesman on road fuel prices. says too few retailers are bringing down the UK average pump price as quickly as drivers and the country’s fight against inflation need.

‘The fuel trade talks of trying to change the narrative on pump pricing, emphasising its higher costs. 

‘However, when a drop in wholesale costs equivalent to a £2 saving from a tank of fuel barely shows weeks later, it looks very much like the same old story. 

‘And when its clear that some retailers are bringing down their prices, you have to ask what’s holding back the majority?

Currently, the pump price of petrol across the UK averages 149.0p a litre (fuelpricesonline.com, from CMA data), having peaked at 150.1p in the final week of April. 

Diesel at present averages 155.8p a litre, having peaked at 158.3p last month. 

AA analysis of petrol pump price data submitted to the CMA by the four supermarkets and four of the main oil companies, covering 2,861 forecourts, found that, on Tuesday, 23.2 per cent were charging at least 150p a litre. 

Just three were offering petrol at less than 140p a litre: one in Newtownabbey in Northern Ireland, one near Guildford and one in Llangefni on the Isle of Anglesey.