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Daily Mirror
Daily Mirror
National
Laura Sharman

Supermarkets slammed for not passing on fuel price cut to struggling customers

Supermarkets have been slammed for not dropping petrol prices despite falling wholesale costs.

Garages are not cutting fuel prices by as much as they should to match the "significant" price drop on the other end, according to the RAC.

The motoring group said the gaps between pump and wholesale prices are the largest in almost a decade,

Prices at the pumps were around £1.76 per litre on Tuesday while analysis from the RAC suggested it should be at around £1.62.

Fuel prices are finally starting to fall after reaching record highs this year.

At the start of the week, the average cost of petrol and diesel was £1.74 and £1.86 per litre retrospectively.

This was based on prices at the four big supermarkets including Tesco, Sainsbury's, Asda and Morrisons.

Tesco petrol station selling unleaded petrol at 99.9p per litre in 2020 (SOPA Images/LightRocket via Getty Images)

However, the average price for the delivered wholesale petrol last week was £1.24 while diesel was £1.38.

After taking VAT, fuel duty and a "generous" retailer margin of 10p per litre into account, the RAC said "forecourts should soon be selling unleaded for no more than £1.62".

It is not the first time the UK's major fuel retailers have faced scrutiny for keeping prices high at the pumps.

In early July, RAC data also revealed how garages were not passing on the savings they were making.

Driver pumps fuel at an Esso Tesco petrol station in July 2022 (Getty Images)

Retailers' actions have angered many across the country.

RAC spokesperson Simon Williams said: "There appears to have been a big shift in the last few months in the behaviour of the four major supermarkets which dominate UK fuel retailing as they are now commonly being undercut by independent retailers that are passing on the wholesale cost savings they're benefitting from to drivers at the pumps.

"This is unheard of as the supermarkets are normally at least 3p a litre cheaper than the UK average."

Many supermarket fuel stations are still charging high prices on the forecourt despite wholesale prices coming down in recent weeks (Getty Images)

Supermarkets usually tend to be cheaper than independent retailers because they buy fuel more often meaning they can react quickly when wholesale prices change.

Mr Williams explained how this was usually reflected in the speed at which they pass on rising costs on their forecourts when wholesale prices increase.

He added: "As the supermarkets account for so much of all the fuel sold across the country and they haven't lowered their prices as much as they should have, it means average UK prices have not come down in line with the significant drop in wholesale fuel."

The RAC has criticised the move (Getty Images)

The difference in cost between retail and wholesale prices is the largest since RAC records began in 2013, excluding VAT.

Current gaps are bigger than they were at the start of the pandemic, during lockdowns, and when the price of oil plummeted to around £10.50 per barrel.

Oil rose to almost £82 per barrel in recent months.

The difference in cost between retail and wholesale prices is at its highest in nine years (Getty Images)

And fuel prices were already increasing before Russia invaded Ukraine in February.

But the effects of the war has worsened the situation.

Sanctions on Russia, one of the world's largest exporters of oil, has increased demand for oil from other producers, causing hikes in prices.

Despite the UK importing just 6 per cent of its crude oil from Russia, it is still impacted when costs increase worldwide.

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