In February average fuel prices dipped slightly by 0.4p per litre unleaded and 0.5p per litre diesel versus January. Prices are still higher than they were at the same point last year by over a penny. The last time fuel prices were higher during February was in 2014, which was when the price crude oil was above $100 a barrel. The main point of contention on price has been the how quickly petrol retailers have passed on reductions in the wholesale price and this has been a prevalent theme throughout the month.
Falling wholesale prices
The RAC first issued a request to the supermarkets at the beginning of February to lower their prices in light of the drop in wholesale prices. The cost of a barrel of crude oil fell by $5 at the beginning of February. The RAC hoped that supermarkets would drop their prices by around 3p a litre. The wholesale cost had dropped by 7% from 25th January to 7th February, meaning the cost of buying the fuel had already declined significantly.
The RAC firmly believed that the big four supermarkets had room to drop their prices as the average was sitting at 119.49p for petrol and 122.13p for diesel. Dropping their prices would see motorists paying less at around 8,500 forecourts across the country and would be a welcome boost for drivers.
(Credit – Stephen McKay)
Prices still rising
But as of the 7th February the price of fuel was still going up, reaching 122.17p for petrol and 124.91p for diesel. The RAC were keen to see the supermarkets reduce their prices from that point as the half-term holidays came around and knew they could afford to drop them by around 3p a litre. Some supermarkets were running promotions such as Tesco, who offered a whopping 10p a litre off fuel if you spent £60 or more in a single shop.
Regional differences also showed scope for changes as well. In Somerset, for example, the supermarkets were selling fuel around 10p lower than the average price around the UK and 7p a litre less than the average versus major petrol retail brands.
Double price cuts announced
Following ongoing pressure from the RAC on February 9th, ASDA led the way with a drop of 2p per litre and many supermarkets followed suit, such as Morrisons and Sainsburys with similar price cuts. During the same week, the cost of oil had fallen further to $61.46, the lowest price since the middle of November last year. The increased exchange rate also helped, meaning that the wholesale price of fuel also fell a little further.
A week later something unusual happened in that ASDA cut their prices again by a further 2p per litre taking prices down to an average of 116.8p per litre. The rest of the industry was taken aback by the change but did react a few days later, Morrisons and Sainsburys also dropped their pricing again, so a double price drop in the space of a week.
Kudos to the RAC
We should give thanks to the RAC for prompting the supermarkets to make these changes.
Simon Williams from the RAC commented: “The sharp drop in the price of oil gives them a perfect opportunity to reduce their pump prices by 3p. The fall in the wholesale fuel price gives them a great opportunity to turn up the heat in what has become something of a ‘cold pump price war’ in recent weeks.’
The recent drop in the price of oil has been caused by an unexpected increase in fuel stocks in the US, sparking fears of oversupply into what is traditionally a season of lower demand. In addition, the North Sea Forties pipeline, which was shut down in December due to a crack, has just reopened. This will bring 450,000 barrels of Brent crude oil a day on to the market, making prices less competitive.”
What’s the position now?
As we enter March the fuel price has steadied for the moment at an average 120.1p per litre unleaded and 122.9p per litre diesel. The biggest fear is what impact the extreme cold weather will have on pricing. Gas prices have rocketed in price from 90p per therm to 200p per therm in less than a week and there are potential shortages.
While this is not likely with petrol and diesel supplies, what may be an issue is whether tankers are able to get to petrol forecourts to deliver the fuel if there is too much snow and bad weather conditions. Our advice is fill up if you can now just in case as prices are quite reasonable.
What do you think of the RAC and their intervention in the market and acting as a Watchdog over the petrol retailers? Do you think pricing should be Government regulated? Let us know in the comments below.
Interesting points and ASDA seem to be cheapest around us, but Morrisons have a 3 to 4p litre differential between 3 outlets 5 miles apart. Typically always the same with instant price rises and laggardly cuts. We’d all be better off on the train…if there were any you could rely on, LOL!
Why oh why cannot some consumer based watchdog lobby the home heating oil suppliers to drop their prices. I have noticed that as crude oil prices rise, the consumer prices rise immediately,but as they fall the oil suppliers in their cartel delay in passing the reduction to consumers.
Heating oil suppliers own up to profiteering!
well i think the goverment should cap all fuel prices
Why would they cap fuel price they are happy to keep it high do your home work just think how much the tax man makes from fuel same with fags and and drink.
Do you really think this government cares how much your paying.
The only time they think fuel duty is when they want your vote.
Good work RAC
Congratulations to the RAC for this intervention. Let’s hope that the big suppliers/supermarkets take heed and act swiftly the next time there is a fall in the wholesale price or exchange rate.
When I shop in Sainsburys in various parts of the country, I pay the same price for milk, cereals, soap powder, etc but different prices for the same fuel – interesting. Garages will sell fuel for the largest price they can get away with
I notice the same thing with Tesco. When there is another supermarket selling fuel nearby Tesco lower their price to compete. But in towns where there are no other supermarkets selling fuel they will charge up to 10p per litre more.
Thankyou to the RAC , perhaps they should run this spineless country!!
I find ASDA consistent around my area Leicester but Sainsbury now undercut them at 112.9 -if you are going that way of course.Tesco seem to have given up and just rob anyone daft enough.Pity those with no choice in the sticks.
Well done RAC
Thank you for being our voice
Here in Neath south Wales we have only had 1p a litre off no Asda to push price’s down.
There is an ASDA and a Tesco half a mile apart a few miles north of Neath their prices are always lower.
Good for the RAC. Keep the pressure on.
Back in 2010, oil was over $130 a barrel, and diesel was about £1.30 per litre. Given that fuel duty hasn’t increased since 2010, and the price of oil is around $63, can anyone explain why diesel is selling at around £1.25 per litre. Someone is having our trousers off, and I would suggest it’s between the refiners and the retailers.
After being in petrol retail for 30 years I can tell you it’s not the retailer.
Everytime petrol prices is increased the retailer loses out.
Cost of stock bank charges etc.
So as a retailer, who is it that is ripping us all off?
I would say the petrol company’s and the refinery.
The retailer doesn’t get a say really as a retailer you just get a call from the petrol company telling you what price to sell at your small margin stays the same.
As an independent I have seen the supermarket selling
It cheaper than I could buy it from the petrol company’s.
A ten pence rise on the poll means the retailer as to find another £4000 per load to make even less profit.
Back in the days when you had to change the price on the poll by hand, many a time I have had customers say to me you making some money out of this.
I used to think if only you new the facts.
Yes, thanks to RAC for monitoring fuel prices on our behalf and then going the extra mile by demanding fuel stations lower their prices accordingly!!
Sorry but why only ask Supermarkets to drop their prices. Millions of drivers don’t have access to cheap supermarket prices. I can’t remember the last time our local garage charged less than 124.9 for diesel, unfortunately they have no competition for many miles. So come on RAC, think about drivers in the rural community as well
Goond job someone is looking out for us
And they wonder why the rise in populism.
People have had enough of being constantly milked like the proverbial cash cow!
Government regulation bad bad bad. Well done rac as we are getting robbed
Well done RAC its about time someone stood up for the (ordinary) motorist.
Price increase, fuel cost rise immediately. Price decrease, unfortunately, fuel cost eventually fall. The solution is: Prices should rise and fall in both cases
immediately. That is fair
Years ago, I monitored petrol and diesel pump prices against wholesale ARA prices and what I noticed most was that suppliers were profiteering disgustingly upon diesel – at one point, the supermarket’s own margin on diesel (after accounting for the wholesale base price and taxes) was over 15p per litre, while at the same time their margin on petrol was around 3-4p per litre. The highest margin I ever saw taken by supermarkets on petrol was briefly around 8p per litre and that was while wholesale prices were tumbling and the retailers were being slow to pass the saving on. For premium brands (Shell, BP, Esso, etc) the margin was even higher, of course. They started off with the excuse that the wholesale price of diesel was much higher (it used to increase a lot in winter due to US heating oil demand, but nowdays the US is self-sufficient due to fracking), but then the wholesale price of diesel dropped below that of petrol and yet retailers maintained higher pump prices for diesel. After several months of the diesel wholesale price being several pence per litre less than for petrol, I saw the pump price of diesel drop to the same as that for petrol – it dropped below the price of petrol for a couple of weeks, but only because ASDA ran a brief campaign of specially reducing their diesel price – but that was as good as it got and even then the retailers were taking twice the margin on diesel that they were taking on petrol. I pursued this matter with the Office of Fair Trading (with detailed data) and they refused to act. I took it up with the Petrol Retailers Association and got pure bull in reply. The government hates diesel and will not act against diesel profiteering because of course they get VAT on the higher retail prices. It is a disgrace.
Try thinking out side the box and you will understand why that can’t happen
Only if they are on the ball and do not lack behind!
I paid £1.04.9 for petrol last week at a Sainsburys in Edinburgh.Asda and tesco’s ware cheap too all in the same area at less than £1.10..but when I go back to Glasgow where I live the cheapest I can see is around £1.19..but mostly over £1.20 Whats that all about?
Great idea RAC now to get the AA to do the same
Asda used to charge the same price for fuel nation wide but not any more they are getting greedy where ever they can make money
Exactly, they used to boast that they charge the same price across the country but that seems not to be the case
If I were Prime Minister (and that isn’t likely) I’d set up a national fuel company and gradually buy/build forecourts, which could then sell fuel at a “fair” rate. i.e. Still making a profit but not profiteering. One could also sell LPG and build in electrical charging points too. How BP, Shell, Texaco etc would scream. So would some fuel retailers. Have you noticed, that, usually, Euro Garages are always dearer than others; certainly here in the S. Look them up on the net. Last I heard the two brothers that founded it were worth over £500M. I boycott the places on principle.
I Agree with you that euro garage SHOULD be boycotted, there is a euro garage round my are at markam vale off the Juction 29A of the M1 they selling at the moment petrol 1.34 a litre and diesel 1.38 tom me this is definitely a rip off when i questioned them about it they said they can charge whatever they wanted garages like them should be boycotted
They had a national fuel company in Venezuela and that was NOT a success.
I would like to say a big thank you….
Thanks to the race, the government will not help bring prices down, the higher it is the more tax they earn, and when was the last time one of the big fuel companies announced price cuts before the supermarkets.
Fair play to the RAC for getting the Supermarkets to play ball. I still don’t understand why Diesel is so much more expensive than Petrol though…. There is some profiteering going on somewhere I fear..
why just the RAC? cant the AA stick their noses in as well & make double trouble for government
Investment tip. Buy BP [BP.] and Shell [RDSB]. The dividend yield will make you smile.
And Albanian Leks- they can only go up!
PERHAPS THE HOUSE OF COMMONS investigations Committee should call in the CEO S AND CHIEF FINANCIAL OFFICERS OF THE Big5 io instruct them to reduce the prices or face anextraordinary tax surcharge
congratulate to the RAC for putting a spoke in for us, i myself am disabled i hate the idea where they put 10p off if you spend £60 or more on shopping NOT everyone can afford to do this
Well Done RAC!, yes government should regulate and cap
A Large pat on the back for the RAC, keep up the good work.
Our local Sainsbury’s have been selling unleaded at around 12-13p less per litre than all other retailers in the area for over a month (although Tesco’s have just started matching it). The price of unleaded at Sainsburys has been around 112p per litre, whereas everywhere else it is around 123p.
Thanks to the RAC. This pressures needs to be carried out EVERY TIME there is a wholesale price reduction or exchange rate improvement.
The fuel produces have been getting away with profiteering for far too long.
Yes Cap the fuel prices as they are going to do with gas and electric.
Morrisons Consett where I live always charges more for fuel than what they do 10 miles down the road at Blaydon I suppose that’s because Asda gives them competition. I’ve noticed Asda Always seems to be one of the cheapest fuels of all the supermarkets.
Asda. Move to Consett.
Capping prices is not the answer. As I fear we will see with gas and electric.
I suppose that the diesel car is now the ” Bad Boy on the Block ” the fuel suppliers will be adhering to the Governments voice of keeping the price of diesel high so as to make people change their cars for petrol engine cars.
I have never sussed out why diesel fuel is so expensive, because in the fuel cracking towers, the diesel and gas oil, together with parrafin are on the lower level of fuel run offs, and the high Octain fuels like petrol are on a higher run off channel of distilation processes.
It’s always cheaper in mainland Europe
Not so much anymore in France, it’s catching up.
Can anyone else not see that the prices go up, then they drop the price and we cheer them. So when they drop the price again its just what they should have done first. No real double price cut just a marketing ploy to make us think they’re good guys.Well done RAC though.
I would like all prices to be relative to our currency as I don’t have .9 coinage. Why is the Government allowing fuel costs to be priced in this way? Fuel seems to be the same as Beer with regard to what retailers can buy it at from a managed point of view. All our pricing in this country should be of a uniform nature when it comes to Fuel why is BP garages so dear compaired to Supermarkets. Supermarkets don’t refine the stuff but BP does so it should be cheaper it all boils down to Rip Off Britain.