A rough month for drivers: petrol suffers 2p a litre jump in March

A rough month for drivers: petrol suffers 2p a litre jump in March
Diesel now 8p a litre more expensive than petrol but price cut on the horizon. Diesel is also 8p dearer than same time in 2017 and 2018.

The average price of petrol rose for the second month in row with a litre going up by 2p in March to 122.58p, data from RAC Fuel Watch* shows.

This means filling a 55-litre family car with unleaded now costs £67.22. The average price of diesel also increased but only 0.70p to 130.67p taking a fill-up to £71.87.

This is the second straight monthly increase for both fuels, making unleaded 2p more expensive than it was at the same time in 2018 and 2017 (120.11p – 2018; 120.15p - 2017).

Diesel, however, is nearly 8p dearer (122.82p – 2018; 122.19p – 2017), or £4.30 a tank. But the current price of petrol is still 8p a litre cheaper than it was in October last year (131p), which was the highest price seen since July 2014, and diesel is also 6p cheaper than it was in October (136p in October).

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The pump price rises have been fuelled by a 4% jump in the cost of oil from $63.81 to $68.07 and a 2% drop in the value of the pound against the dollar ($1.32 to $1.30) – the worst possible combination for motorists.

The increase in the wholesale cost of petrol, which equated to 6.5p in March, started to be passed on by the supermarket fuel retailers immediately. This led to a litre of supermarket petrol going up 1.7p in March to 118.59p and a litre of diesel rising 1.27p to 127.48p.

Asda and Sainsbury’s both raised their prices by 2p a litre in the month. Asda, however, began a series of almost daily rises from late February, making for a 3.6p litre hike by the close of March (113.7p – 21 Feb to 117.31p – 31 March).

As a result of Asda’s increases, which weren’t mirrored by the other three major supermarkets, the gap between the country’s cheapest fuel retailer on petrol and the other supermarkets has closed.

From the end of October until the end of February the other three supermarkets were charging around 3p more for a litre of petrol than Asda but this has now closed again to the customary 1p to 1.5p.

RAC fuel spokesman Simon Williams said: “March has been another rough month for petrol drivers. Unleaded has gone up 2p a litre and diesel by just short of a penny.

"Diesel drivers are particularly feeling the pinch at the moment, as compared to this time last year and the year before a litre is on average 8p more expensive than petrol. Worse still, diesel is also 8p dearer than it was at this time in both 2018 and 2017.

“Throughout March the wholesale price of diesel was on average 6p a litre more than petrol. This gap has now closed which should hopefully bring some relief to drivers of diesel vehicles.

"If retailers play fair with motorists the price of the fuel should fall by around 3p a litre in the next fortnight whereas petrol looks like it’s set to rise further with at least a penny or two likely to go on in the coming weeks.

“Fortunately, normal competition between supermarket fuel retailers over the price of petrol has resumed after four months of Asda being considerably cheaper than its competitors. Whether this is as a result of keener pricing from the others or from Asda moving its unleaded price closer to its competitors is hard to know.

“Supermarkets play a vital role in UK fuel retailing as despite only having a fifth of forecourt sites they have 45% of the fuel market which means that everyone else selling fuel has little option but to compete with them. And, if there isn’t good competition between them it can mean the UK average price of fuel is adversely affected, to the disadvantage of all drivers.”

Motorists can keep abreast of the latest fuel prices by visiting the RAC Fuel Watch webpage.

* UK average fuel prices quoted in the RAC Fuel Watch March 2019 report are based on Experian Catalist data from 1 to 31 March 2019 (pump prices). Regional prices are based on Experian Catalist data from 1 to 31 March. Wholesale prices, oil price and the value of sterling are based on data from 1 to 29 March 2019.

*With a new fixed 18 or 24 month plan. Excludes Standard cover. Ends 19/10/21, 7am.