UK fuel prices: drivers still getting raw deal on petrol and diesel

June 06, 2024 by

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While fuel prices dropped slightly in May, UK diesel drivers pay highest in Europe and retailers still making record margins

  • Average petrol price drops to 147.88p per litre in May
  • Average diesel price drops to 153.58p per litre in May
  • Retailer profits on a litre of fuel are higher than ever
  • Northern Ireland offers the lowest average fuel prices in the UK
  • Asda is no longer the cheapest supermarket fuel provider
  • UK diesel prices are still the highest in Europe
  • CMA could help curb unfair pricing practices

Consumers breathed a small sigh of relief in May when petrol prices dropped by 2.4p per litre to 147.88p, and diesel went down even more by 4.5p to 153.58p.

However, digging a little bit deeper reveals that drivers of diesel vehicles in the UK pay the highest price in Europe and retailers are still charging way higher margins than they should.

Fuel margins at an all-time high

RAC’s Fuel Watch data shows that despite constantly dropping wholesale prices, retailers are not passing this saving on to customers as quickly as they should. Historically, margins for both petrol and diesel combined have been at 8p per litre. Compare this to the 13p that is currently being levied on petrol, and the 16p for diesel.

Northern Ireland remains the place where fuel prices are the fairest, with petrol just 141.p per litre. Diesel is even more affordable compared to the rest of the UK and is 9.9p cheaper at 142.5p. Yet, compared to the rest of Europe, diesel is still the most expensive in the UK, according to the RAC, and petrol consistently ranks among the 10 most expensive. A 5p per litre duty cut that was introduced over two years ago should have improved matters, but retailers seem to be retaining more profits than ever before.

Supermarket fuel: Asda no longer cheapest

Asda has long prided itself on offering the cheapest fuel to customers but now falls behind all its major rivals, charging on average 2.1p more for petrol and 2.5p more for diesel. Morrisons was the cheapest place to buy your fuel in May.

The RAC analysed supermarket fuel prices and found that prices could differ by as much as 40p per litre. This is an example of what the industry calls ‘rocket and feather’ pricing, where price hikes are immediately passed on to the consumer, but price drops take far longer to reach the pumps.

CMA ready to tackle unfair pricing

The Competition and Markets Authority (CMA) collects retailer fuel data to assess whether customers are being charged fairly, and its latest report shows that this is increasingly not the case.

Dan Turnbull, Senior Director of Markets at the CMA, said: “Drivers are feeling the pinch as fuel prices have been edging up since January. We’re particularly concerned by high margins which indicate weakened competition and are not a good sign for drivers.”

While providing data to the CMA is currently voluntary, it will become compulsory later this year, giving consumers access to real-time data which should lead to enhanced competition between retailers.

This could lead to fairer pricing regardless of forecourt locations, more transparency for consumers, and an end to ‘rocket and feather’ pricing strategies that unfairly inflate fuel prices for the end user.

Until then, check out our list of the most economical petrol and diesel cars currently on sale and find the cheapest fuel in your area with our Petrol Prices calculator.

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