Back in March 2023, diesel prices were over 20 pence per litre (ppl) more than unleaded. Prices for diesel fell sharply in May. This was just before the Competition and Market Authority (CMA) released its findings following an investigation into the retail fuel market.
In June and July, pump prices for diesel were around 2ppl more than that of unleaded. However, since the summer, the pump price of both diesel and unleaded has risen. September started with diesel being priced on average 3ppl over unleaded, and it finished at over six pence higher.
October has seen some slight price drops in unleaded, but diesel has been slower to decline, leading to it being sold at a premium of seven pence over unleaded.
Wholesale diesel prices have been trading over ten pence higher than unleaded during October and even as high as 15 pence. In part, this is the result of fuel supply cuts from Saudi Arabia and Russia, in particular diesel, into the European markets. The UK uses more diesel than it produces and so is reliant on imports. Whereas the UK produces more unleaded and so unleaded is less affected by these cuts.
Diesel margins appear to have increased a couple of pence since October but remain lower than at the start of the year. Unleaded margins, however, do appear higher than at any point earlier in the year.
As part of the CMA’s investigation into the fuel retail market, Asda was fined for “failing to provide relevant information in a timely manner.” In a later meeting with MPs, Asda confirmed their strategy was to be the most competitive supermarket. However, over the last three weeks, Asda has lost its competitive edge. Sainsbury’s is now the supermarket with the lowest priced unleaded.
Prices can vary significantly by region, with motorists in Greater London and Cheshire among those who can expect to pay the most. While drivers in Angus and Aberdeen can expect to pay the least.
The start of October saw a drop in crude oil prices, which in turn helped reduce the wholesale cost of diesel and unleaded. On 5th October, Brent Crude Oil dropped to $84 a barrel, but this has since risen back to $90. It wouldn’t be surprising to see this lead to rises in diesel prices at the pump once more.