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RAC urges supermarkets to reduce 'extremely unfair' profit margins on petrol and diesel

The RAC has highlighted the high profit margins that supermarkets have placed on petrol and diesel as the prices at the pumps continue to rise.

According to a study conducted by the organisation, the typical profit margin on a litre of petrol rose by 2p to 12p whilst retailers are also making 18p per litre of diesel sold; an increase of 3p.

Simon Williams, Fuel Spokesperson for the RAC, noted that the rising profit margins are contributing towards the growing inflation rate.

He explained: “Having tracked fuel prices against consumer inflation, it’s easy to see the link between the two. We therefore have a strange situation where unreasonably big fuel margins are making inflation higher than it should be.

“It’s very concerning to see fuel margins at such high levels, particularly as this is happening under the close eye of the CMA [Competitions and Market Authority] and while retailers are voluntarily sharing their forecourt prices with the intention of increasing competition.”

Traditionally seen by motorists as one of the most affordable places to buy fuel, RAC Fuel Watch noted that the average cost of petrol in late April 2024 was 150p per litre, whereas a litre of diesel typically retailed at 157p.

However, the organisation suggested that neither fuel has increased in value on the wholesale market for over two weeks.

As a result, the RAC claimed that, if the profit margins were reduced to a fairer amount, drivers would pay around 145p per litre for both petrol and diesel.

Simon called for supermarkets offering fuel to cut their profit margins by at least 5p to help support motorists at a time in which the cost-of-living crisis is affecting motorists.

He advised: “We feel the current margins being charged by larger retailers in particular are extremely unfair on drivers struggling to get by in the cost-of-living crisis.

“The big four supermarket retailers, which dominate fuel sales, are once again flatly refusing to cut their prices in the wake of much lower wholesale costs. If they were being fair on drivers, they should already have shaved at least 5p off their current petrol average of 147p and 8p off diesel, which averages 154p at a supermarket forecourt.”

To prevent high profit margins from driving up the cost of motoring, the Government has introduced the Pumpwatch scheme.

Whilst the system is yet to be a mandatory requirement for all fuel retailers, garages and supermarkets can volunteer to make their profit margins transparent to the public.

The RAC and other motoring bodies, such as the AA, have welcomed the scheme, but have warned that retailers must be held to account for the profit margins they implement.


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