RAC seeks bigger diesel price cuts

RAC seeks bigger diesel price cuts

Motorists should be benefiting from cheaper diesel prices being passed on to them at supermarket pumps, the RAC has said.

Friday's call comes only a day after supermarket diesel retailers such as Sainsbury's dropped their forecourt prices by 2p per litre.

RAC's Fuel Watch information suggests the capacity for further 3p-per-litre cuts is available, with wholesale diesel now 6p lower per litre than petrol.

Simon Williams, fuel spokesman for RAC, said: "A fundamental change in the fuel market is taking place as a result of Saudi Arabia opening two new refineries last year geared to the production of refined oil products, including diesel.

"Saudi Arabia had previously concentrated on exporting crude, leaving refining to other countries, but greater European demand for diesel has led the kingdom to increase its refining capacity to create a profitable additional source of income.

"We expect this increase in diesel production to have a long-term positive effect on pump prices.

"If retailers operate transparently we will see reductions in the wholesale price of diesel passed on at the forecourt.

"This should mean diesel will soon be sold for the same price as petrol, or less just as it is in other countries around Europe."

He added: "Some independent forecourts have already brought their diesel price down below petrol but we should really be seeing this on a wider scale on supermarket forecourts.

"It is good news the supermarkets have responded to the RAC's call to reduce the price of diesel, but RAC Fuel Watch data tells us this should be just the beginning of a series of cuts.

"We believe it would be fairer for motorists driving diesel vehicles if supermarkets made bigger cuts in one fell swoop rather than trying to phase price reductions over an extended period."

Mr Williams went on: "We would like retailers - particularly the supermarkets who tend to lead the way in forecourt pricing - to explain why they are maintaining an artificial gap between petrol and diesel.

"It would be very worrying if they were simply taking advantage of motorists' expectations that diesel is always more expensive than petrol.

"Wholesale petrol hasn't been cheaper than diesel since May 27, yet since then diesel pump prices have been up to 3p a litre more expensive than petrol.

"We realise that petrol pricing is particularly cut-throat and many retailers reduce prices and profit margins to stay competitive, but something really needs to change as diesel drivers are losing out and subsidising every fill-up of petrol."

Stable pound-to-dollar exchange ratios and oil prices helped June's fuel costs to flat-line.

Diesel's average 120.75p per litre cost for June is 15p less costly than in the same month last year, while petrol's typical 117p mark is 14p down on 12 months earlier.

This is still a steady rise on early February's average lowest levels, when diesel cost £1.13 and unleaded £1.06.

Drivers wanting to keep updated about fuel prices can visit www.rac.co.uk/advice/fuel-prices-explained .

Copyright Press Association 2015