Fuel pump horror: Retailers refuse to pass savings as profit margins soar to 12p per litre

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Experts at the AA warn that retailers passed on up to 60 percent of the savings due to the collapsed oil wholesale costs under the first UK shutdown. However, during the second lockdown firms have reduced costs by the barest of margins with some falling by just half a penny.

The retailer and supplier margin has been around 8.5pence to 9p a litre since early August but has jumped up under the second shutdown.

This now stands at above 11p last week and is now edging towards 12p as firms cash-in on the pandemic.

The AA warns that after one month of the first lockdown pump prices had crashed by 11p from 121.28p to 110.40p.

This was particularly down to wholesale costs falling by 16p a litre from an initial 32p per litre starting point.

During the second lockdown, retailers have passed on just 12.5 percent of their potential savings in a major concern.

Luke Bosdet. AA’s fuel price spokesman warned average prices have only “dipped” across petrol stations instead of seeing higher increases.

He warned retailers may use the excuse that low car use is to blame for a lack of determination to reduce prices.

However, car use has dramatically increased compared to the first lockdown meaning that retailers are not losing out on as much profit.

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He said: “In the first lockdown, as the price of oil and wholesale petrol plummeted, the fuel trade passed on 60 percent of the savings they could have.

“This time, after a second wave of coronavirus sent the cost of oil and fuel falling again, average pump prices have only dipped.”

“In the spring, car use fell as low as 22 percent. At the start of this week, it’s down to 70 percent.

“Drivers wait to see if ‘lower fuel demand’ gets trotted out again as the excuse for many retailers not passing on potential savings.”

“For the moment, with a tank of supermarket petrol averaging more than 6p a litre cheaper, it’s pretty clear where drivers should start looking for a fairer price.”

Sainsbury’s recorded the highest petrol decline over the past month with costs down 1.35 pence per litre.

Costs stood at 110.22p last month but have been reduced to a more manageable 108.77.

AA analysis has found that Asda is still the cheapest place to fill up a petrol car with costs at just 108.50ppl.

Asda is also cheapest for diesel with costs at just 111.49 pence compared to 113.51 this time last month.

The massive 2.02 pence reduction was the third-highest for diesel fuel with Sainsbury’s 2.05ppl reduction just ahead.

But Tesco saw the highest reduction for diesel costs with a massive 2.35 pence per litre fall from 114.93 to 112.58 ppl.

But it’s not all bad news for motorists with overall pump prices remaining stable for yet another week.

Average petrol prices have fluctuated between 112p a d 113p per litre since July and currently stands at 112.35pence.

Government analysis puts the average price of diesel at 117.07pence, down slightly from the 118p recorded just two weeks ago.

However, analysis from RAC Fuel Watch has warned that prices across the board are “very likely to come down” within the coming weeks.

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