An expert has explained the extent of the great diesel rip off which has been hitting drivers. The government’s Competition and Markets Authority (CMA) is currently conducting an investigation into supermarkets cashing in on big profit margins for fuel - with the results set to be released this week.
On BBC Breakfast Ben Boulos said that 2022 was described as “the most volatile year for fuel prices on record.” It rose to almost £2 a litre for unleaded leaving drivers worrying about being able to go to work or drive to get shopping. He used graphs to explain how the prices had changed and revealed that the gap between the retail and the wholesale price had got much wider - meaning supermarkets were making bigger profits.
The big diesel swindle, as some have branded it, has seen the profit margin on that fuel type rise from 6p per litre in 2021 to 16p this year - a 166 per cent increase.
He said: “This is what petrol retailers pay to buy the fuel in, and it rose sharply because of the war in Ukraine. But it then fell and look. The pump price followed it but slightly behind and notice that wide gap between the two. And when you look at current average diesel prices, well, there’s an even bigger difference. Look at that. That’s the difference between the pump price and the wholesale price.
“And just like with energy and food prices, when the wholesale or production cost falls, there’s always a delay before we see that drop reflected in what we pay at the till. But even so, analysts say the gap between the price at which supermarkets buy fuel and the price they then sell it has become bigger.”
Simon Williams from the RAC said: “ I think the CMA’s focus on the supermarkets is correct. We’ve seen, margins go up incredibly. Their average margin according to our calculations on diesel, is about 16 pence a litre this year compared to six pence back in 2021. So just in two years, they’ve added 10 pence a litre margin, on average, which is, very, very difficult for so many drivers and businesses to cope with.”
“The leading supermarkets say they’ve been working with the competition watchdog to give customers the best value at the pump er. But in May, that same watchdog said it felt some retailers have been deliberately maintaining a higher price margin on fuel than is necessary.”
The chief executive of the Competition and Markets Authority has said that the additional margins that supermarkets are charging for petrol and diesel is not entirely due to factors outside their control, such as the Russian full-scale invasion of Ukraine. “Supermarkets have historically been the cheapest suppliers by and large at the retail level,” Sarah Cardell told MPs on the Business and Trade Committee in May
“And I should say that it remains the case that many of the factors driving up petrol and diesel prices are external factors, including obviously the impact of Russia’s invasion of Ukraine. But nonetheless, what our evidence is showing us is that the rise in margins doesn’t appear to be entirely due to factors outside of retailers’ control.
“What we appear to see is evidence that at least one of the supermarkets has increased its own internal targets for margins, we’re not seeing a strong competitive response from the other supermarkets there.”
Gordon Balmer, executive director of the Petrol Retailers Association, which represents thousands of independent forecourts, said its 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 forecourts are in many cases undercutting supermarkets on price."
