Fat supermarket fuel price margins gobble up driver savings

Supermarkets hold drivers over a barrel, but independent garages show the way with lower prices

Morrisons fuel

While motorists enjoy a long-awaited period of falling fuel prices, the latest data from RAC Fuel Watch shows that the big four supermarket brands continue to enjoy inflated margins at the expense of drivers.

The RAC says the average cost of a litre of petrol dipped by 6p in December, to 146.69p, while diesel fell by 5p to 149.18p. With the cost of a barrel of oil down to $80 on world markets, the pump price for petrol is now back to a level not seen since early in 2022 - before the Russians invaded Ukraine. 

Sadly though, many drivers are still being denied the full benefit of the drop in wholesale prices, as supermarkets cling on to high margins introduced during the recent fuel price crisis. The RAC’s analysis shows the average supermarket margin was 13p a litre in December, more than double the amount they grabbed in 2021.

However, canny motorists can stick two fingers up to the supermarkets by shopping around their local independent fuel retailers, and the RAC has highlighted a filling station at Grindley Brook in Shropshire charging 130.09p for petrol - 7p less than the supermarket average. In Northern Ireland, petrol is 5p a litre cheaper than the rest of the UK average, costing just 135.28p. 

RAC Fuel Watch’s Simon Williams says the recent price cuts are welcome news, but adds “it’s galling that drivers aren’t being charged a fair price in comparison to Northern Ireland where the same petrol and diesel is at least 5p a litre cheaper”.

He says it's impossible to argue that competition in the fuel retailing sector is working fairly, when prices are so vastly different in two parts of the country, and the RAC has challenged Energy Security Secretary Claire Coutinho - in charge of the government’s response to the recent Competition and Market Authority investigation into fuel prices - to ask why supermarkets why they won’t charge Northern Ireland prices everywhere. 

With the wholesale petrol price at 104p per litre, the RAC says supermarket prices could easily be charging drivers around 132p per litre instead of their current average of 137.63p.

The RAC suggests drivers should download its free myRAC app, which features a fuel finder that can help you find your cheapest local filling station.

Check out our guide to finding the cheapest petrol and diesel near you…

Current affairs and features editor

Chris covers all aspects of motoring life for Auto Express. Over a long career he has contributed news and car reviews to brands such as Autocar, WhatCar?, PistonHeads, Goodwood and The Motor Trader.

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