RAC says drivers are being ripped off by 6p a litre on fuel or £3.90 every time they fill up

The RAC says a fall in the wholesale cost of petrol and diesel together with a rise in the value of the pound against the dollar, means retailers have scope to cut prices

Motorists are being overcharged by 6p per litre on fuel, equating to an extra £3.90 every time they fill up their tanks, according to the RAC. The motoring organisation has highlighted that a decrease in the wholesale cost of petrol and diesel, coupled with a rise in the value of the pound against the dollar, should allow retailers to reduce prices.

However, retailers, including supermarkets, continue to increase the margins between what they pay for fuel and how much they charge drivers, reaching historic highs. The Competition & Markets Authority (CMA) recently reported that this resulted in British drivers being overcharged by around some £1.6 billion a year.

Historically, major supermarkets, led by Asda, drove competition across UK petrol forecourts as a way to attract shoppers. However, these stores abandoned this policy during the energy price crisis triggered by Russia's invasion of Ukraine and have since maintained a new status quo of higher margins, hitting drivers in the pocket and fuelling inflation across the economy.

Industry trade bodies argue that retailers are taking higher margins to reflect increases in the cost of doing business, such as the need to pay staff more. However, some smaller petrol retailers along with Costco, who have all the same costs as the major chains, are offering much cheaper fuel.

The RAC revealed that the wholesale price of petrol last week was 103p a litre yet drivers were being charged 142p at the pumps.

The RAC has voiced concerns that drivers are being overcharged at the pump by around 6p a litre, translating to an excess charge of £3.90 for every fill of a 65-litre car tank.

According to the latest figures from RAC Fuel Watch, diesel is currently priced on average at 147p per litre; however, they argue that a fairer price point would be 139p.

RAC's findings also indicate that for the past 16 out of 17 weeks, the UK has had Europe's priciest diesel, in spite of a 5p duty cut introduced by the Tories to shield motorist's discount that could be rescinded by Labour.

The motoring group remarked: "The recent fall in the price of oil and the strengthening of the pound the two biggest factors in determining the wholesale price of petrol and diesel present an opportunity for retailers to regain the trust of drivers by reducing their pump prices significantly."

In some local competitions, independent retailers have been offering better deals than large supermarket chains. For instance, the EG On The Move station in Portlethen, Scotland, was selling petrol and diesel at 16p less per litre compared to Asda, prompting the supermarket giant to slash its prices to compete.

This competitive pricing in Portlethen comes as part of a series of new openings through a partnership between the Co-op and EG On The Move brand.

The EG Group, managed by Zuber Issar, whose brother Mohsin now oversees the Asda empire, sold the majority of its forecourts to Asda in a deal last year but kept 31 sites that are currently being converted to EG On The Move forecourts.

At the famously affordable Essar-branded Grindley Brook independently run forecourt in Whitchurch, Shropshire, drivers can fill up with unleaded for just 130.9p per litre and diesel for 133.9p. This is marginally cheaper than membership-only retailer Costco, which averages 130p for petrol and 134.7p for diesel across its 20 sites.

RAC head of policy Simon Williams commented: "The biggest retailers' refusal not to reduce their prices to fairer levels is continuing to cost drivers dear, and it's all the more outrageous when you factor in the fact we're all meant to be benefitting from a temporary 5p cut in fuel duty, that looks likely to disappear in the coming months."

"While the Competition and Markets Authority has clearly stated drivers were overcharged last year, it's blatantly apparent from our data that this problem is persisting this year."

"Once again, we urge retailers to do the right thing and reflect the lower prices they're paying for wholesale fuel on their forecourts. It's plain for all to see from some of the lower prices being charged around the UK, both across the whole of Northern Ireland and at various other forecourts, that fuel can and should be sold much more cheaply."

"Our analysis shows pump prices at a majority of forecourts should be cut by around 6p for both petrol and diesel. With wholesale prices down, drivers should not be seeing forecourt prices this high, especially as they are supposed to be benefitting from a 5p fuel duty cut. Our Fuel Watch data shows that this is happening as it should in Northern Ireland but, for whatever reason, it doesn't appear to be on this side of the Irish Sea."

"Average retailer margin currently stands at 13p for petrol and a whopping 15p for diesel. This is staggering when compared to the long-term margin figures of 8p for both fuels."

"If a small individual retailer like DA Roberts at Grindley Brook in rural Shropshire is comfortable charging 131p a litre for petrol, surely the multimillion-pound businesses that are the big supermarkets ought to be able to get much nearer to that? ".

"If prices don't fall dramatically in the next week or so, we believe the Government and the CMA should get all the biggest retailers together to demand an explanation. Tough action needs to be taken to change this as drivers are losing out badly every time they fill up."

"Artificially high pump prices also contribute to a higher level of inflation so if prices were nearer where they should be, inflation would be lower, benefitting borrowers and the wider economy."

Motorists hoping to cut costs on their fuel can utilise the fuel finder feature in the free myRAC app. The app, available for download at no cost from the App Store or Google Play, allows up to 10 searches a day within a two, five or 10-mile radius, each search providing the five most affordable prices.