Diesel Consumers Overcharged - RAC



Diesel Consumers Overcharged - RAC

The RAC have released a report stating owners of vehicles that use diesel fuel are being overcharged by retailers. They argue that they are being ìtaken for a rideî- the wholesale cost of diesel has dropped in the previous month yet the price for consumers has gone up.

The wholesale price of diesel on 20 February 2015 was 112.25 pence per litre and was 109.95 pence per litre on 20 March 2015. Despite this marked reduction the price at the pump has gone up over this period from 115.73 pence per litre to 118.35 pence per litre.

The data also showed that the difference between the wholesale cost of petrol and diesel has constricted to just 0.97p more for diesel. The RAC therefore questioned why diesel consumers are paying 6 pence more per litre for diesel. They went on to recommend that there should be a price reduction of 4 pence per litre on diesel fuel.
The RAC also argued that firms more dependent on diesel automobiles were bearing the brunt of the inflated prices set by fuel retailers.

The fuel spokesperson for the RAC, Simon Williams, stated: ìItís hard not to think that business is being taken for a ride by the fuel retailers. Retailers have maintained a higher margin on diesel, perhaps to subsidise petrol sales.î
However, the petrol retail industry has responded by stating that the RAC interpretation of the data is incorrect and their profit margins were in fact very small.

The chairman of the Petrol Retailers Association, Brian Madderson, spoke about their institutionís belief that the RAC had misinterpreted the profit margin for retailers. He commented: ìWe are extremely disappointed that the RAC made a number of assumptions that are palpably erroneous. We have to bear in mind that 900 independent sites closed between 2009 and 2013.î

He went on to argue that most firms that are dependent on diesel fuel have discount cards and other facilities to reduce the cost. Furthermore, Mr. Madderson stated that due to these variables and other considerations, profit margins for retailers were ranging between 0.8 pence and 1.3 pence per litre which is not a sustainable amount for these businesses.

He also pointed to the fact that in the last two months profit margins pertaining to petrol sales had plummeted by a huge 50%.