UK petrol and diesel retailers accused of not passing on falling oil prices to drivers

Already under scrutiny from competition watchdog, sector faces further calls to slash pump prices

Pressure is mounting on petrol station owners to slash fuel prices after accusations of not passing on falling wholesale costs to drivers.

The average price of petrol in the UK fell by 8p a litre in December to 151p and diesel by 9p to 174p, according to the RAC.

But the motoring group accused retailers, including the largest supermarkets, of not cutting prices quickly or significantly enough compared with the falls in wholesale costs.

The price of fuel in the UK is under scrutiny. The competition watchdog began examining the sector amid record prices last summer.

RAC Fuel Watch data showed that filling a full 55-litre tank of petrol cost £83.08 on average at the end of December, £4.63 cheaper than at the beginning of the month. For diesel it was £95.68, £5.19 cheaper.

However, the RAC argues that petrol should be sold at 140p a litre rather than 151p, and diesel at 160p, not 174p.

Oil prices have fallen in recent months amid concerns over the impact of a potential global recession and the economic effects of Covid in China.

The Competition and Markets Authority was asked by the UK government to examine fuel prices last summer after accusations that a cut to fuel duty had not being passed on to consumers.

The CMA initially raised concerns over the margins made by oil refineries, and then later said there was evidence of “rocket and feather” behaviour – when prices shoot up rapidly but come down slowly – in the industry. The investigation continues.

In late December, the business secretary, Grant Shapps, wrote to fuel retailers urging them to “explain changes in pricing behaviour” to the CMA, voicing concerns over pressure on consumer spending. “This government will not hesitate to act to ensure competition is healthy and consumers get a fair deal on their fuel,” he said.

The RAC fuel spokesperson Simon Williams said: “For weeks we’ve been calling on the big four supermarkets to cut their prices more substantially to give drivers a fairer deal when they fill up, so even though they have reduced their prices collectively by more than 10p a litre in December, they are still nowhere near where they should be given the scale of the drop in wholesale prices.

“We hope the business secretary’s intervention just before Christmas puts more pressure on larger retailers to do the right thing.”

RAC data showed UK petrol and diesel prices were highest in London, the south-east of England and east Midlands in December.


Alex Lawson Energy correspondent

The GuardianTramp

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