RAC Criticizes High Petrol Prices Amid Election Distraction

RAC Criticizes High Petrol Prices Amid Election Distraction

Felix Yim 17/06/2024
RAC Criticizes High Petrol Prices Amid Election Distraction

British motorists are currently facing petrol and diesel prices that are "far higher than they should be," according to the RAC.

The motoring organization has accused fuel retailers of exploiting the "distraction" caused by the general election to maintain "persistently high" profit margins. The RAC has urged the UK's competition authority to take swift action to bring fuel retailers into compliance.

The Competition and Markets Authority (CMA) has previously investigated concerns about high fuel prices. Last year, the CMA found evidence that some retailers were overcharging customers. In March of this year, the CMA revisited the issue and expressed alarm over the continued rise in fuel profit margins.

Despite a reduction in wholesale costs since the end of April, the RAC reports that fuel prices at the pumps have remained elevated. Currently, the average price of petrol is 146.3 pence per litre, which the RAC claims is 5 pence higher than it should be. For comparison, the equivalent price in Northern Ireland is 141.1 pence per litre. Additionally, the UK has experienced the highest diesel prices in Europe for the past seven weeks, with an average cost of 151.5 pence per litre.

The RAC's data indicates that the current profit margins for retailers are 14 pence per litre for petrol and 16 pence per litre for diesel. These margins are significantly higher than the long-term average margins of 8 pence per litre. Simon Williams, the RAC's head of policy, has voiced strong criticism of this discrepancy.

"While there has been much focus on fuel since the Competition and Markets Authority concluded the biggest retailers had overcharged drivers by £900 million in 2022, margins are once again staying persistently high - and drivers are paying the price," said Williams. "Our data clearly shows that pump prices haven’t fallen in line with the reduction in wholesale prices, so drivers across the UK - with the exception of those in Northern Ireland where fairer prices are charged - are once again losing several pounds every time they fill up."

In response, the Petrol Retailers' Association (PRA) has defended the current pricing, arguing that comparing current fuel margins to historical figures fails to take into account "several critical factors." Gordon Balmer, the PRA's executive director, outlined these factors, which include significant increases in operating costs, reduced fuel volumes post-pandemic, and substantial investments required to transition to a low-carbon transportation system.

"We must consider the significant increases in operating costs, reduced fuel volumes post-pandemic, and the substantial investments required to transition to a low-carbon transportation system," said Balmer. "These factors mean that fuel retailers need to earn more from fuel sales to stay in business and invest in the future."

Balmer also highlighted that many PRA members are investing in electric vehicle (EV) infrastructure, despite the slow uptake of EVs and the long payback periods associated with such investments. "Forecourts are ideally suited to electric vehicle charging points, and many PRA members are investing in these despite the slower-than-anticipated uptake of electric vehicles and the long payback periods for such investments," he added.

The debate over fuel prices and profit margins comes amid a broader discussion about the future of transportation in the UK. As the country moves towards a low-carbon economy, significant investments are needed to support the transition to electric vehicles. However, these investments come at a cost, and fuel retailers argue that they need to maintain higher margins to cover these expenses.

The CMA's investigation and subsequent findings have put pressure on fuel retailers to justify their pricing strategies. While the RAC calls for immediate action to lower prices, the PRA insists that the current margins are necessary for the long-term viability of their businesses and the broader transition to greener transportation.

As motorists continue to face high fuel prices, the debate between consumer advocates and fuel retailers is likely to persist. The outcome of this debate will have significant implications for both the cost of driving in the UK and the country's efforts to reduce carbon emissions.

In the meantime, drivers are encouraged to stay informed about fuel prices and consider ways to reduce their fuel consumption. The RAC and other motoring organizations offer tips and advice on how to maximize fuel efficiency, which can help drivers save money at the pump while also contributing to environmental sustainability.

The ongoing issue of high petrol and diesel prices in the UK has sparked a heated debate between consumer advocates and fuel retailers. While the RAC urges for immediate action to reduce profit margins and bring relief to motorists, the PRA defends the current pricing as necessary for sustaining business operations and investing in future technology. As the country navigates the transition to a low-carbon economy, the balance between affordable fuel and necessary investments remains a critical challenge.

Share this article

Leave your comments

Post comment as a guest

0
terms and condition.
  • No comments found

Share this article

Felix Yim

Tech Expert

Felix is the founder of Society of Speed, an automotive journal covering the unique lifestyle of supercar owners. Alongside automotive journalism, Felix recently graduated from university with a finance degree and enjoys helping students and other young founders grow their projects. 

   
Save
Cookies user prefences
We use cookies to ensure you to get the best experience on our website. If you decline the use of cookies, this website may not function as expected.
Accept all
Decline all
Read more
Analytics
Tools used to analyze the data to measure the effectiveness of a website and to understand how it works.
Google Analytics
Accept
Decline