Fuel price disparity needs addressing

Fuel price disparity needs addressing

The RAC wants diesel sold cheaper at the pumps to bring prices more in line with petrol.

Companies particularly, are being "taken for a ride" by fuel retailers, who are passing on too much of a price increment on diesel fuel.

Simon Williams, RAC fuel spokesman says: "The gap between the wholesale price of diesel and petrol has narrowed to just 1p a litre, yet average forecourt prices are currently 6p a litre apart (diesel 118.28p v petrol 112.05p).

"With sales of diesel at such buoyant levels there is scope for a diesel price cut of around 4p a litre to restore some parity to the market and redress many retailers' decision to subsidise the petrol price with savings in the cost of wholesale diesel."

Mr Williams' comments follow official government figures showing that 3.5% more fuel was sold last month than during February 2014.

The 2.42 billion litres of diesel sold last month was the fifth highest since 1990 and 4.5% higher than in February last year.

"It's hard not to think that business is being taken for a ride by the fuel retailers," he added. "Traditionally, business runs on diesel, and with sales of diesel at an all-time high the retailers have maintained a higher margin on diesel, perhaps to subsidise petrol sales.

"While clearly some businesses with big, high mileage fleets buy their fuel ahead of time to manage their fuel spends in case of price fluctuations, the prevailing view is that businesses are less price sensitive than consumers which possibly leads retailers to keep margins higher on diesel than petrol. In doing so they appear to be keeping the country's 20 million private car drivers sweeter.

"The reality is that pricing of petrol and diesel does vary between retailers with some choosing to more closely reflect the wholesale price of diesel rather than keeping it artificially higher."

Petrol sales were up 2% last month but this was the eighth lowest total since 1990.

Mr Williams said: "We now have evidence of a marked increase in journeys and mileage following the dramatic fall in pump prices brought about by the price of crude oil halving since the middle of last year.

"There are a number of factors which impact the price of diesel generally serving to make it more expensive at the pump, however the wholesale price of petrol has increased recently due to the start of the driving season in the US."

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