Home Business Diesel drops 12p but should be lower, says RAC

Diesel drops 12p but should be lower, says RAC

Diesel drops 12p but should be lower, says RAC

By Michael RaceBusiness reporter, BBC News

5 hours ago

image source, Getty Images

Diesel prices fell by an average of 12 pence per liter in the UK last month, according to the RAC.

Pump prices fell from around £1.59 to £1.47, the group said, cutting the cost of filling up a family car by £6.50.

The RAC said the cut was the largest monthly drop since it began monitoring prices in 2000.

But the automotive group argued that the price drop “was both long-lasting and smaller than it should be” because wholesale prices were lower.

The British Retail Consortium, which represents the supermarkets, said there have been “major cuts” in diesel prices in response to falling wholesale costs.

Diesel prices are now down more than 25% from 2022 highs, after falling for seven months in a row.

The fuel hit a high of £1.99 a liter last summer after oil prices soared following the Russian invasion of Ukraine.

Petrol prices have also fallen steadily since then, falling on average from £1.46 to £1.43 last month, according to figures from the RAC.

The automotive group has suggested that prices have not fallen as quickly or as much as they should, noting that prices in Northern Ireland were significantly lower.

The RAC said the reduction should have been larger to fully reflect changes in the wholesale market as the wholesale cost of diesel had been lower than petrol for 10 weeks.

In May, the Competition and Markets Authority (CMA) announced it was investigating fuel prices and whether a “competitive failure” had caused drivers to overpay.

The watchdog said it was “concerned about continued higher margins on diesel compared to petrol” so far this year.

It said evidence it had gathered so far suggested that at least one supermarket had set a higher target for its profit margin on fuel prices by 2022, which could have led rivals to follow suit and also raise prices.

The RAC said, after calling for price cuts in recent months, it “seemed ironic that the latest price cuts have finally been implemented in the two weeks following the Competition and Markets Authority’s announcement”.

“What happened to the diesel price in May will undoubtedly make the CMA think,” said Williams. “We very much hope that pump price cuts continue as they should.”

Gordon Balmer, executive director of the Petrol Retailers Association, which represents thousands of independent filling stations, said the advice to drivers was to “shop around”.

“As noted by the CMA, petrol and diesel prices are still volatile due to the ongoing war in Ukraine. The market is very dynamic and independent filling stations undercut supermarket prices in many cases,” he added.

A separate review of the fuel market has been underway for several months following initial concerns that retailers and filling stations were not passing on a 5p fuel tax cut to motorists.

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