British drivers are still paying up to 7p per litre more for fuel than they should be, according to the RAC.
Despite a significant fall in wholesale oil prices in January, prices at the pumps rose almost constantly throughout the month before a small last-minute cut by supermarkets.
According to the RAC’s Fuel Watch, the wholesale price of unleaded fell by just over 4p per litre while diesel fell by 7.5ppl but both increased by 1ppl on forecourts between the start and end of the month.
RAC fuel spokesman Simon Williams said: “Based on steadily falling wholesale prices January should have been a good month for drivers at the pumps, but instead they ended up being paying well over the odds at the pumps. In fact, January was a perfect example of ‘rocket and feather’ pricing where prices go up far faster than they come down.
“Retailers were very quick to protect themselves from a slight jump in the price of oil caused by the tensions between Iran and the US at the start of January by putting up forecourt prices, but when the cost of a barrel dropped back, for some reason, retail prices carried on going up.”
Too little, too late
Wholesale oil prices fell below $60 a barrel in January for the first time since August, partly due to a fall in global demand caused by travel restrictions linked to the coronavirus. However, retailers increased their forecourt prices for the second month in a row.
Supermarkets cut their prices by 3p per litre at the end of the month but average prices were still up compared with December (Photo: Shutterstock)
Williams added: “Our biggest retailers – the supermarkets – blatantly resisted passing on the savings they were making to drivers until the RAC publicly called on them to do so on 27 January when RAC Fuel Watch data showed there was scope for a large cut. Two days later a headline-grabbing 3p a litre cut was announced.
“This was clearly good news, but it’s hard to congratulate retailers on doing something they should have done at least a week before. Even since the cut pump prices are still out of kilter with what’s been happening on the wholesale market. As things stand now – despite the cuts – petrol is still 5p too expensive and diesel over 7p too dear.
“We strongly urge retailers of all sizes to play fair with drivers and cut their forecourt prices. Going forwards we call on them to charge prices that more closely mirror drops in the cost they buy fuel in at in the same way they do when prices go up.
“Sadly however, drivers are at the mercy of fuel retailers and this generally means they lose out on getting a fair deal.”
Drivers in Northern Ireland continue to enjoy the lowest average prices - at 125.6ppl and 129.2ppl - while those in England’s south-east pay most - 128.4ppl and 132.9pppl.