Drivers of petrol vehicles have been significantly overcharged for fuel as retailers failed to reduce pricing in line with falls in wholesale prices, the RAC has said.
The motoring organisation suggests the high prices cost drivers of petrol vehicles around £156 million in the final month of the year, or around £5 million a day, despite lower wholesale prices.
Prices of unleaded fuel were lowered to 147.47p per litre from 154.48p, but the RAC says prices should have fallen closer to 135p per litre “had retailers played fair”.
Diesel only dropped by 2p per litre, from 150.80p to 148.92p. The RAC says drivers should have been paying around 142p.
“December was a rotten month for drivers as they were taken advantage of by retailers, who rewrote their pump price strategy, costing motorists millions of pounds as a result,” said Simon Williams, an RAC fuel spokesperson.
“Their resistance to cutting prices and to only pass on a fraction of the savings they were making from lower wholesale costs is nothing short of scandalous,” Williams said. “The 10p extra retailers have added to their long-term margin of 6p a litre has led to petrol car drivers paying £5m more a day than they previously would have.”
It is estimated that retailers took an average margin of 16p a litre on petrol instead of a long-term margin goal of 6p, and 12p on diesel. The RAC claims this cost drivers £6 more to fill up a 55-litre petrol car and the average diesel driver paid £4 more.
“In the past when wholesale prices have dropped, retailers have always done the right thing –eventually – and reduced their pump prices,” Williams said.
“This time, they’ve stood strong, taking advantage of all the media talk about ‘higher energy prices’ and banked on the oil price rising again and catching up with their artificially inflated prices, which it has now done.”
The Petrol Retailers Association disagreed with the RAC’s claims, suggesting the December data is less reliable because it was “taken from fuel card transactions.”
“There have been far fewer of these transactions because of the reduction in business activity between Christmas and new year,” Gordon Balmer, executive director of the association, told the BBC.
“The costs of running petrol stations rose all year, with electricity up 19%, vastly reduced margins from fuel cards, increased national insurance and wage inflation,” he said, stating the fuel market is still “extremely competitive”.