According to a motoring organization, average unleaded prices are 14p per litre higher than they ought to be at gas stations, which is being accused of defrauding motorists.
Only 10% of forecourts are presently charging a fair price for gasoline and diesel, according to research by the RAC.
According to the driving lobby, merchants should charge about 174p for a gallon of unleaded.
However, unleaded gasoline presently costs an average of 188p. Diesel, meanwhile, is reportedly 7p per litre overvalued.
The average price of diesel is currently around 196p per litre, but the RAC thinks it should be closer to 189p.
The price gouging allegations follow the AA’s forecast that drivers would soon be able to fill up their tanks for £10 less over the course of the following two weeks due to a decline in wholesale costs.
Due to a number of causes, including a sudden increase in demand around the world as Covid controls relaxed, Russia’s invasion of Ukraine, and refineries expanding their margins, wholesale fuel prices have surged.
The past six weeks have seen a consistent decline in them.
The RAC, however, claims that gas stations are failing to pass on the price reductions to customers.
Weekly wholesale gasoline prices, which are what retailers pay to buy fuel, have dropped by a whopping 17p per litre, from an average of roughly 152p per week at the beginning of June to just 135p this week, according to RAC fuel spokesman Simon Williams.
“However, the average pump price has dropped by a pitiful 4p.” Every shop needs to act morally by lowering their pricing to more fair ranges.
The data comes from a recent research by RAC Fuel Watch, which examined price information from Experian Catalist.
More than 4,500 UK forecourts were sampled by the RAC to determine what they are charging for gasoline and diesel.
In order to reflect wholesale pricing over the last two weeks, which were significantly lower than the current average of 188p, the motorist organisation feels that retailers should be charging closer to 174p for a litre of unleaded.
But according to its study of the statistics, only 157 gas stations are offering a litre of gasoline for between 170.9p and 179.9p.
These are divided into 125 independently operated gas stations, 28 large supermarket locations, and four locations owned by oil firms.
The remaining establishments, or 4,436 in total, sell unleaded for 180p or more per litre.
With a current average price of 196p per litre for fuel, the situation is hardly much better.
The RAC estimates that the per-liter price at the pump should be around 189p.
However, its data reveals that only 250 out of 4,805 forecourts are selling their products for between 180p and 189.9p.
Of those, 192 are privately held, with only 43 being run by large grocery chains and 15 by energy companies.
Historically, supermarkets have dominated the petroleum industry by offering the most affordable pump pricing.
The RAC claims that the main four supermarkets’ average price for a litre of gasoline and diesel, which has typically been approximately 4p, is only around a penny less than the UK average.
Our investigation of these new data reveals something else that is really telling, according to Mr. Williams.
It appears that smaller independent outlets are willing to defy the general forecourt trend, rather than the big four supermarkets, as the pricing leaders.
The days of fuel “price wars,” in which retailers slashed their prices at the same time and made a huge deal out of it, appear to be long gone.
Instead, retailers seem to prefer to argue over the cost of groceries, which, while beneficial, ignores the significant amounts that consumers must spend on fuel to keep their automobiles operating.
He asserted that motorists who fill up at supermarket gas stations have “every right” to feel let down by the going rate.
It comes after the AA forecasted that due to a decrease in wholesale pricing, drivers would soon be able to save £10 when filling up their tanks in the following two weeks.
The price of gasoline has decreased to 188.76p per litre from 191.53p per litre on July 3, according to the AA.
Diesel, on the other hand, was at 199.07p per litre on July 1 and is presently at 196.96p per litre despite a slowdown in the rise in fuel prices.
‘Wholesale petrol’s trajectory, if continued, would result in savings of a tenner off a tank from the record highs, if the fuel trade is prepared to pass them on,’ said Luke Bosdet, the AA’s fuel price spokesman.
The issue, he continued, is that despite cost decreases over more than six weeks, price reductions simply aren’t taking place in many places.
While the war rages, it’s tough to see how crude does anything but go higher, and that’s not good news for gasoline prices in the medium run.
You just cannot replace the amount of oil that Russia produces, which is the problem.
Furthermore, prices might not drop significantly despite US efforts to persuade Saudi Arabia to increase exports.
Although there may be slight ups and downs, he continued, “Crude is likely to keep marching upward, and that will put the pressure on petrol prices rising also.”
It comes after claims by the UK’s competition authority that one of the primary drivers of skyrocketing petrol prices is expanding oil refining margins.
After fuel had been processed by oil refineries, the Competition and Markets Authority (CMA) claimed to have uncovered a substantial increase in prices.
Drivers have been paying exorbitant rates at the pump, but the regulator discovered that the cost gap between wholesale crude oil and refined gasoline and diesel had more than tripled in the previous year, going from 10p to almost 35p per litre.
One of the five main price points for gasoline is the “refining spread,” which is more than tax when fuel duty and VAT are added together.
The government’s 5p fuel duty decrease ‘on the whole looks to have been executed,’ according to the urgent assessment conducted by business secretary Kwasi Kwarteng last month when fuel costs drew dangerously close to staggering £2 per litre.
It was discovered that in the days following the reduction in fuel duty, prices at supermarket gas stations were reduced by about 5p.
However, those at independently owned and operated oil companies decreased less, according to CMA.
According to the watchdog, fuel costs were reduced by about 3.5p at facilities run by oil companies and by about 2.1p at independently run sites.
Nevertheless, the CMA acknowledged that the Government’s 5p tax cut was imposed at a time when costs and crude oil prices were both rising.
Supermarkets, which account for roughly half of all gasoline sales, would have faced a cost as a result of lowering prices by 5p, while other retailers effectively passed through the tax break while not lowering prices to the full amount, according to the CMA.
According to the report, “on the whole, it appears that the fuel duty drop has been implemented, with the biggest fuel merchants doing so immediately and others more gradually.”
Immediately after the duty reduction, supermarkets—which account for 44% of all petrol sales—lowered their prices by just over 5p per litre.
They most certainly paid a price for doing so for the reasons mentioned above.
Other types of retailers likewise reduced their prices in the days after the duty reduction.
These price cuts totaled less than 5p: roughly 3.5p for sites run by oil companies and 2.1p for sites run independently.
The tariff cut prevented retail prices from rising during a time when they could have otherwise been anticipated to do so.
For a response, MailOnline has gotten in touch with the Petrol Retailers Association.
Gordon Balmer, Executive Director of the Petrol Retailers Association, issued a statement in response to the CMA’s probe, saying: “We agree with the CMA’s findings.”
“In recent months, we have witnessed politicians and motorist organizations try to use gas station owners as a scapegoat.
This study clears up any accusations against gas station owners while raising doubts about how well these detractors comprehend the retail fuel sector.
The Petrol Retailers Association will keep contacting lawmakers, advocacy groups, and auto clubs to encourage them to learn more about the market.
We anticipate a more mature discussion about how to get the greatest prices for drivers as a result of the CMA’s market study.
“We are certain that our research will reassure drivers that gas stations are trying their best to feed and fuel their communities while operating on thin margins,” the authors write.