According to the RAC, a leading car and breakdown services company, UK drivers are currently paying the highest prices for diesel in all of Europe. The average cost for a litre of diesel is 155p, which is 5p more expensive than the next highest average of 150p in both Ireland and Belgium. In comparison, the average cost for unleaded fuel in the UK is 149p, ranking it as the 11th most expensive in Europe.
The RAC has expressed concern over the high diesel prices, stating that there is “no good reason” for the cost and that retailers in the UK should consider reducing prices at the pumps. Upon analyzing data, the RAC found that the margin retailers are charging for diesel – the difference between wholesale costs and the final price excluding VAT – is significantly higher than the long-term average. This can be attributed to a lack of competition in the market.
However, the RAC notes that in Northern Ireland, where there is more competition for fuels due to the absence of supermarket dominance, the average price for diesel is only 144.9p, which is 10p less than the UK average. Additionally, petrol prices in Northern Ireland are 6p cheaper at 142.4p.
Despite the UK government’s efforts to assist drivers with high oil costs by cutting the tax on motor fuels by 5p in March 2022, prices continue to rise. The RAC’s data shows that other European countries with higher fuel duties still pay less overall to fill up their vehicles. For example, Italy has the same amount of fuel tax as the UK but currently has diesel prices at an average of 148p per litre – 7p cheaper than the UK.
The RAC compiled this data using information from the Competition and Markets Authority (CMA), which recently completed an investigation into margins at supermarket petrol stations. The CMA found that increased supermarket profit margins led to drivers paying an extra 6p per litre for fuel in 2022. In March of this year, the regulator stated that the margins remained “concerning”.
In an effort to promote price transparency, the CMA has proposed a “pumpwatch” system where forecourts would have to enter prices within 30 minutes of a change, allowing drivers to easily find the cheapest petrol and diesel options. The executive director of the Petrol Retailers Association, Gordon Balmer, explains that rising operational costs and high levels of crime contribute to the higher pump prices. He also notes that a significant percentage of diesel transactions in the UK are made using fuel cards, which operate on lower margins, further compressing the margins available to retailers.
Despite these challenges, the PRA remains committed to providing fair and competitive prices. They encourage motorists to use resources such as petrolprices.com to find the best deals available.
