Petrol Price still too high as vendors take a bigger slice profits

As BP posts record profits of £7 billion, retailers are still taking 10p per litre more than normal for the price of petrol

motorcycle refill at petrol station

SEPTEMBER saw the average price for a litre of unleaded in the UK fall by nearly 7p per litre, marking the most significant six-month drop since the year 2000. The RAC reports that these savings helped motorists to the tune of around £3.50 for the average tank of petrol.

While the saving on fuel is very welcome at the moment, could more be done to help out hard-pushed road users? It seems it could, as in the same week that BP posted profits of £7.1 billion between July and September, the RAC, is reporting that retailers are still taking 10p per litre more than would normally. And that is despite a drop in the price they are paying for fuel in the first place.

Fuel prices have been on the up for some time now, with most within the petrochemical industry pointing to the war in Ukraine as the driving force behind the rise. Whether or not that is wholly true remains to be seen, although, with recent revelations showing how much petrol has dropped, and conversely how much retailers and producers are profiting by, consumers must be feeling dubious about the whole thing.

What affects the petrol price, and why is it still high?

The price of the liquid gold we buy at our local fuel station is directly linked to the price for a barrel of the raw material it is made from – crude oil. The RAC reports that crude oil was trading for around $130 per barrel in mid-June this year, although by the end of September that price had dropped to $87.96, some 5%. These numbers point to UK consumers still being hard done by when filling up their tanks. This has led to retailers still netting more money for a litre of fuel than they actually should, something that Simon Williams from the RAC thinks has to change.

“Despite September seeing the sixth biggest ever drop in the price of petrol drivers really should have seen a far bigger drop as the wholesale price of delivered petrol was around 120p for the whole month. This means forecourts across the country should have been displaying prices around 152p given the long-term margin on unleaded is 7p a litre.

“In stark contrast to this RAC Fuel Watch data has shown margins to be around 17p a litre – a huge 10p more than normal. And the average price of petrol at the big four supermarkets is only 1.5p lower than the UK average – less than half what it usually is which points heavily to them not playing fair with drivers.”

Whether or not fuel retailers do indeed ‘play fair’ with drivers is another story, although, in the face of massive profits such as those posted by BP, you’d think that maybe it was time for the government step in and help with the problem.