posted 1 year ago

Diesel Wholesale Price Cut Not Passed To Motorists

Diesel wholesale price falls below petrol but motorists still pay more at the pump.


Diesel Wholesale Price Falls Below Petrol

Diesel now has a lower wholesale price than petrol but still costs more at the pump, the RAC Fuel Watch Report shows. In June 2015, its wholesale price – the amount a retailer pays its supplier – was between 1 and 3 pence per-litre lower than petrol. However, its average retail price was £1.20 whereas petrol cost £1.17. The RAC claims that the discrepancy is “the elephant in the room” and a “taboo subject” despite the fact that 2.4 billion litres of diesel were sold in May 2015. Petrol sales were only 1.5 billion litres. Such figures reflect the nation's increasing reliance on diesel. It now powers more than 50% of new cars and light commercial vehicles.

Diesel Retail Price Should Be Fair

RAC Fuel Spokesman Simon Williams said: “While retailers are obviously free to choose how much they charge for petrol and diesel, we believe that motorists deserve to be treated fairly and that means forecourt prices that reflect the wholesale market. What is required is a fundamental re-balance of pricing in the retail fuel market. We need greater transparency and a fairer pricing model for both petrol and diesel.” He adds: “We realise that with more and more forecourts shutting up shop every month that fuel retailing may not be as profitable as it once was, but there seems to be a clear intention to make more money from a higher diesel price while at the same time being seen to maintain a lower petrol price”.

The RAC says that whereas some retails have closed the gap “very few – if any – have moved their diesel price below petrol”. It claims the vast majority “continue to keep a significant gap” between the fuels with diesel often 5 pence per-litre more expensive. It theorises that some retailers have a wafer thin profit margin on petrol, so charge more for diesel to remain profitable.

Diesel Vehicles And The Congestion Charge

There could be more misery for diesel owners in the future. The London Congestion Charge could rise for all but the most efficient models, for starters, and Paris looks set to ban some completely. Such initiative could spread through the UK and the wider world. The RAC's Simon Williams concluded: “All this comes after years in which the taxation system has encouraged motorists to buy low carbon dioxide emitting vehicles. This has led to a big take-up of small fuel efficient diesel vehicles by motorists believing their choice of vehicle was good for the environment as well as their pocket.”