Fuel dealers are accused of cutting profits as drivers face new record prices
The economy minister is warning operators to treat customers fairly as they increase profit margins amid predictions of further price hikes
Fuel dealers have been accused of taking advantage of hard-pressed motorists by stretching their profits as petrol and diesel prices soar.
Analysis of fuel margins shows retailers are earning 2p a liter more compared to mid-March before Chancellor Rishi Sunak cut 5p a liter from the fuel tax.
Their margins are now 11p a liter for petrol and 8p for diesel, compared to 9p and 6p respectively in the month before the tariff cut.
RAC fuel spokesman Simon Williams said it meant drivers were being denied potential savings and warned that volatile oil prices made more price hikes inevitable.
The numbers have prompted Economy Minister Kwasi Kwarteng to warn that service station operators must be aware of their responsibility to treat customers fairly.
On Monday, the RAC reported that the average price of a liter of diesel had surpassed 180p for the first time. This was backed up by figures from analyst Experian Catalist, which also put the fuel at 180.3 pence per litre. Separate government figures suggest it was 179.7p – a record high by its own account.
Petrol has yet to return to the record 167.3p set on March 22 but the RAC and Experian Catalist both report it is currently at 166.8p and is likely to rise.
Mr Williams said: “With oil prices trading above $110 a barrel and the pound falling to $1.20 it now looks inevitable that petrol will set a new average price record in the coming days which is even more important for drivers means misery.
“While the 5p per liter tariff cut in March makes a difference, it has not proved as helpful as the Government had hoped, meaning there is little to prevent an even higher price.
“The RAC analysis of fuel margins shows that, for whatever reason, retailers are charging an average of 2p per liter more than before the Chancellor’s 5p tariff cut. The average margin for petrol is currently 11p per liter and 8p for diesel. To put this in perspective, the long-term average margin is 7.5p for unleaded and 8p for diesel.”
In response to the latest figures, MrKwarteng has written to the industry to “remind them of their responsibilities”.
In the letter, Mr Kwarteng said motorists were rightly concerned about the pace of price increases at the pump and “rightly frustrated that Chancellor Merkel’s fuel tax cut does not seem to have visibly or meaningfully passed through to pump prices”.
He wrote: “The Chancellor and I therefore want to once again underline and communicate our expectation that the members will do everything possible to ensure that motorists are treated fairly nationwide.”
The Petrol Retailers Association, which represents independent service stations, blamed rising oil prices, lower demand and “extra costs” for the apparent discrepancy between prices and profit margins.
Managing director, Gordon Balmer, said comparing pump prices to wholesale prices “only gives a partial picture” and retailers are competing for the “thinnest of margins”.
He claimed that once price instability and additional costs such as storage and delivery are factored in, retailers often struggle to cover their operational costs.
He said: “Five pence a liter was not a significant cut to reduce the burden on motorists of rising prices.
“While the chancellor was announcing this, oil prices were rising, effectively erasing the cut.
“In addition, sales volumes of gasoline and diesel are still not reaching pre-pandemic levels.”
https://www.nationalworld.com/lifestyle/cars/fuel-retailers-accused-of-hiking-profits-as-drivers-face-new-record-high-prices-3697568 Fuel dealers are accused of cutting profits as drivers face new record prices