Supermarkets accused of exploiting fuel prices for ‘blatant profiteering’

Supermarkets accused of exploiting fuel prices for ‘blatant profiteering’

22 Jul    Finance News
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The cost of petrol will stay at £1.80 a litre or more unless supermarkets cut their artificially high prices, a fuel campaign group has warned.

Fair Fuel UK has accused retailers of “blatant unchecked profiteering” as prices at the pump increase over the summer despite a fall in the price of crude oil. Howard Cox, the campaign’s founder, said that without supermarkets returning to more competitive pricing and the government making further cuts to fuel duty, pump prices would “sit around £1.80-plus for the foreseeable future”.

The RAC said that although retailers ought to be charging about 174p for a litre of unleaded, the average price was now 188p, up from 134p this time last year. Of the 4,500 service stations the RAC sampled, 96 per cent were selling unleaded at 180p or more a litre. Diesel on Tuesday averaged 196p a litre, compared with the 189p analysis by the RAC has calculated it should cost once VAT and a 7p retailer margin are factored in.

Only 10 per cent of service stations are charging a fair price for petrol and diesel. The vast majority of these are independently owned sites rather than big retailers, analysis by RAC has found.

Simon Williams, the motoring group’s fuel spokesman, said it was time for every retailer “to do the right thing” and cut prices at the pump.

“Weekly wholesale petrol prices — that’s the price retailers pay to buy the fuel — have fallen by a massive 17p a litre, from a weekly average of around 152p at the start of June to just 135p this week,” he said. “Yet average pump prices have reduced by a paltry 4p. Drivers who fill up at supermarket forecourts have every right to feel let down that they are being charged well over the odds for petrol and diesel right now.”

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In the past supermarkets have tended to boast the best pump prices, coming in at roughly 4p cheaper per litre than the UK average. However, drivers filling up at any of the big four supermarkets — Asda, Tesco, Sainsbury’s and Morrisons — can now expect to save only a penny per litre. Sainsbury’s is offering its customers a 4p cut on fuel, but only if they first spend £120 in the store.

Independent retailers are proving far more willing to keep prices in check. According to the RAC, 80 per cent of stations charging a fair price for unleaded fuel are independently owned. Last weekend a fuel station in Newton Abbot, Devon, was charging 164.9p a litre.

Luke Bosdet, the AA’s fuel price spokesman, said: “Motoring organisations have been told off by the fuel trade for daring to criticise its failure to pass on wholesale cost reductions rapidly. Yet it seems that many cut-price small fuel stations didn’t get the memo from the big boys to keep pump prices artificially high for as long as possible.

“The problem though with these maverick fuel stations with awesome prices is trying to locate them, and that means their power to affect pump prices over a wider area is reduced.”

According to data gathered by the banking app Revolut and released by the Office for National Statistics, card spending on fuel increased by 8 percentage points in the week to July 17 compared with the previous week, up 46 percentage points on the same time the previous year. Families heading off on a summer getaway can expect to pay £27 more per tankful than at the start of last year’s season.

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Supermarkets accused of exploiting fuel prices for ‘blatant profiteering’

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