But drivers are finally getting a better deal, RAC says
Drivers are finally being charged a fairer price at the pump despite rising gasoline and diesel prices through January, according to new data from RAC Fuel Monitoring shows.
The rise in the cost of a barrel of oil last month – from $79 a barrel at the start of January to over $92 at the end – pushed up wholesale petrol and diesel prices by 4.9 pence and 3 .6 pa liter respectively. Fortunately for drivers, prices at the pump have risen by less than a penny for each fuel, with retailers absorbing the cost increases, with the average cost of a liter of unleaded now at 146.45p and the diesel at 149.81p.
This means the cost of filling a 55 liter family car with petrol is now £80.55 and with diesel £82.40.
In January, RAC figures show the average margin (profit) made by retailers on a liter of petrol was 11.4p, down from 16.4p in December. While this is still significantly above the long-term average of around 6p, it’s a step in the right direction of delivering better value to drivers when filling up. The average margin on a liter of diesel has now returned to more normal levels at 8p, from 12p in December.
Slight pump price reductions last month stand in stark contrast to the final month of 2021, when petrol fell just 2p a litre, despite RAC analysis showing average prices should have fallen by closer to 12 pence.
In the UK, Northern Ireland saw the biggest increase in pump prices, with the average cost of a liter of petrol rising by 1.74p to 143.55p and diesel by 1.83p to 146 ,31p. Nonetheless, the province remains the cheapest place to fill by some margin, and at the opposite end of the scale is the South East of England where prices are highest. Drivers here pay an average of 147.66p per liter of petrol (up 1.18p in January) and 151.07p for diesel (up 0.63p from last month).
RAC fuel spokesman Simon Williams said: “Finally, retailers seem to have heard our clarion calls for drivers to be charged a fairer price at the pump – something that is so important that the he effect of high inflation is biting and as households move up and down the country prepares for what looks like an inevitable squeeze in the cost of living. On average, retailers are now making a more normal profit for every liter of fuel they sell than they did in December, making today’s pump prices – albeit up slightly from compared to December – more justified.
“Thunderclouds are gathering, however. As oil now trades above $90 for a week – the highest price in more than seven years, wholesale fuel prices are rising to new, which will no doubt lead to retailers raising prices on the forecourt Our message to the larger retailers, who dominate the market, is to treat drivers with respect by fairly reflecting the changing wholesale fuel market and by not taking too high margins. If they were to increase their margin and raise prices beyond what is warranted, it would be devastating to beleaguered drivers. We will be watching pump prices closely in the weeks ahead to ensure drivers aren’t exploited, so it’s safe to say that the coming weeks will be a big test of price transparency for retailers.
“Any driver thinking of switching vehicles would do well to consider an electric model given the high fuel prices. To help drivers make the switch at a lower cost, we offer competitive offers Electric vehicle rental offers and great value EV charging price at home which can be repaired until June 2023 and currently costs just 6 pence per kilowatt hour overnight.