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AA highlights '3p-a-litre diesel price rip-off'

The report finds that pump prices for mid-June average 130.47p a litre for petrol and 135.70p for diesel. A month ago, the fuels averaged 129.92p for petrol and 136.26p for diesel.

The AA says that the crisis in Iraq has helped to lift the price of oil from around $109 a barrel at the beginning of June to above $113 at the beginning of this week. However, much of the potential to push up wholesale prices was offset by a stronger pound breaching the 52-week high against the dollar, after the Bank of England’s governor hinted at an interest rate rise.

It adds that the latest pump prices have created a price-gap between petrol and diesel of 5.23p a litre, despite the gap at wholesale price level averaging just 0.8p over the past month. Compared to neighbouring countries, EU commission statistics show the UK’s failure to pass on the near-parity of wholesale petrol and diesel prices to drivers at the pump.

While diesel drivers in the UK have lost out because fuel suppliers and retailers have increased their margins by not passing on more of the cheaper wholesale costs, petrol drivers have benefited from lower margins on theirs.

In effect, suppliers and retailers are charging 1p a litre less to provide petrol at UK pumps this summer while the fuel industry has increased how much it takes from diesel drivers after tax and product cost. This has left UK diesel drivers paying on average around 3p a litre more than they should be at the pump.

In response, the AA says that the 3p-a-litre diesel price rip-off means that UK diesel drivers are overpaying by as much as £1.48 million a day.

Edmund King, AA president, said: ‘The pump price battleground is usually centred on petrol, the UK’s headline car fuel. However, the pumped-up price of diesel so far this summer is hitting 35% of UK car owners and is inexcusable. Neighbouring European countries have passed on the benefit of lower diesel wholesale costs to their drivers while the UK’s fuel industry has chosen to siphon off the savings.’

Looking at national and regional prices, the AA’s latest report finds that the North sells the cheapest petrol at an average of 130.1p a litre. Northern Ireland, despite being the only part of the UK not to see the average petrol price rise, remains the most expensive at 131.3p a litre. London sells the cheapest diesel, averaging 135.4p a litre, while Scotland sells the dearest at 136.3p.

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Written by Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.

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