RAC has reprimanded the Big four grocers over their alleged failure of not reducing petrol pump prices in line with the drop in the wholesale price, stated reports on Wednesday (3).
Retailers are not fairly reflecting the fall in wholesale petrol prices for consumers at the pump, RAC Fuel Watch data shows.
The average price of petrol fell in July by nearly 9p (8.74p) to 182.69p a litre and diesel came down by almost 7p (6.69p) a litre from 199.07p at the start of the month to 192.38p by the close.
But while these are the third and fourth biggest monthly reductions respectively in the last 20 years, the RAC says they still don’t fairly reflect the fall in the wholesale price of fuel, implying major retailers should be cutting pump prices much further.
The wholesale cost of petrol delivered to forecourts has fallen for eight consecutive weeks by a significant 20p from 151.93p at the start of June to 131.75p a litre in the last week of July. The last time unleaded was this price on the wholesale market was in early May, which a week later led to a UK average pump price of just 167p a litre.
The RAC said that the failure of the biggest retailers to reduce petrol pump prices in line with the drop in the wholesale price of unleaded has cost drivers dearly.
This includes the ‘big four’ supermarkets – Tesco, Asda, Morrisons and Sainsbury’s – along with several other suppliers.
RAC fuel spokesman Simon Williams said: “July has been an unnecessarily tough month for drivers due to the big four supermarkets’ unwillingness to cut their prices to a more a reasonable level, reflecting the consistent and significant reductions in the wholesale cost of petrol and diesel.
“As it was, we saw independent retailers leading the charge with fairer pump prices appearing all around the country, which eventually forced the supermarkets to finally implement a more substantial cut late last Friday afternoon.
“What ought to have happened is that the biggest retailers cut their prices more significantly on a daily basis, given the wholesale price of petrol has fallen steadily over the last eight weeks. Instead, average retailer margin for petrol across the industry has been up around 20p a litre for the last two weeks – more than three times its long-term average.
“The best advice for filling up is no longer to assume the supermarkets are the cheapest, but to shop around as it’s highly likely you’ll find an independent retailer which is doing the right thing and fairly reflecting their lower wholesale costs by charging a lower price,” he added.
“This is really encouraging because the independents buy new stock less frequently than the supermarkets as they don’t sell as much, and consequently aren’t as well positioned as their rivals to be able to snap up fuel at lower prices when there are sudden market drops.”