Pump prices fell for the second consecutive month in December, but not by the level they should have done considering the sharp drop in the price of oil, data from RAC Fuel Watch shows.
The average price of unleaded went down 2.75p from 123.67p to 120.92p and diesel reduced by 3.08p from 133.09p to 130.01p. Oil, however, crashed 14.5% from $60.31 at the start of the month to $51.52 on 27 December which should have meant prices at the pump were considerably lower.
RAC Fuel Watch data shows the price of unleaded should come down in the next fortnight by more than 8p a litre to 113p a litre and diesel by 10p a litre to 120p if retailers passed on savings in the lower wholesale price. This would see the supermarkets charging around 110p a litre for petrol and 117p for diesel.
At the end of December it cost on average £66.51 to fill up a 55-litre family car with unleaded – £1.51 less than November – and £71.51 for the equivalent diesel vehicle, and a saving of £1.69 on the previous month.
A litre of unleaded cost an average of 117.23p at the four biggest supermarkets, and diesel 126.76p. The average price at an Asda forecourt, however, was 114.7p a litre for petrol and 125.53p for diesel. At motorway service areas petrol was sold for an average of 138.48p and diesel for 148.14p.
In Wales the average prices of petrol and diesel were just below the national figures at 120.65 and 129.97ppl respectively.
But despite the overall picture showing a reduction in the cost of fuel in December, the RAC fears fuel retailing among the big four supermarkets may have changed forever – to the detriment of every driver – as only Asda is close to reflecting the lower wholesale prices at the pumps.
Since mid-October the other supermarket fuel retailers have chosen not to compete as closely on the price of unleaded as they usually do – they are currently charging up to 4p a litre more for unleaded than Asda. As a result drivers across the UK have lost out as the average price of petrol should have dropped by that amount through the ripple effect caused by independents trying to match their closest supermarket rivals’ prices.
RAC fuel spokesperson Simon Williams said, “While it’s good news fuel prices have fallen for the second month in a row, drivers should feel cheated they have not come down further.
“The problem is twofold: firstly, there should be a cut in the price of petrol to properly reflect lower wholesale prices and secondly, three of our biggest supermarkets appear no longer to be competing on the price of unleaded, in particular, as closely with the lowest price supermarket retailer, Asda.
“Normally, the other three supermarkets are 1p to 1.5p more expensive on unleaded, but our data shows that since October they have abandoned this strategy in favour of pricing 2.5p to 4p higher for a litre of petrol.
“The decision by all supermarkets to take more profit on a litre has led to every driver having to pay more to fill up than they should have to. This is because the UK average is negatively affected as other retailers are not being forced through competition to lower their prices.”