The RAC has warned that fuel retailers are failing to fully enclose the huge falls in wholesale costs, impacting diesel drivers the most.
A new analysis conducted by the Royal Automobile Club said that while wholesale diesel prices fell by 32p, pump prices only dropped by 20p per litre in the eight weeks to December 11.
In a similar time frame, petrol wholesale costs lowered by 23p a litre, but average pump prices dropped by just 18p per litre after a whole month.
The RAC said this makes more money for retailers by “keeping pump prices artificially high”. This technique, known as "rocket and feather pricing", occurs when pump prices quickly reflect increasing wholesale costs but are slow to drop when costs decrease.
Price reductions at forecourts ground to a halt this week as wholesale costs started slowly rising again. RAC fuel spokesman Simon Williams said: “This is a galling situation for drivers who are struggling more than ever given the impacts of the wider cost-of-living crisis.
"The question now is whether retailers start to bump up their prices. This will depend on whether they decide to continue enjoying larger margins or let them return to more normal levels. Looking at current wholesale costs there is absolutely no justification for pump prices to rise.
“We urge the Government to focus on ensuring retailers quickly pass on savings to drivers every time there is significant downward movement in the wholesale price of fuel – not just to ensure drivers aren’t treated unfairly, but also because there is a clear correlation between high fuel prices and higher levels of inflation.”
The analysis backs up a report by competition watchdog the Competition and Markets Authority published last month, which said drivers were the victim of “rocket and feather” pricing in 2022.
Business Secretary Grant Shapps wrote to fuel retailers on December 22 urging them to “ensure savings are passed on to consumers” after it emerged drivers were being hit by record Christmas getaway fuel prices.
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