The Great British Diesel Rake Off
Founder | FairFuelUK
UK motorists, businesses and the haulage industry are deliberately being fleeced at the pumps as oil prices continue to tumble. With various businesses in the fuel supply chain from refineries to retailers shamelessly increasing their profits, our recent fuel pricing data from highly reputable sources shows that it is diesel that is being exploited predominantly at the pumps.
Since May 2015, oil prices in sterling have fallen by over 55.8 per cent and yet wholesale prices for petrol in the same period (net of all taxes) have dropped by only 39.9 per cent and at the pumps even less at just 26.9 per cent.
Whilst wholesale diesel prices have nearly matched the fall in oil prices by dropping 54 per cent, at the pumps, staggeringly drivers are not getting the same and are paying just 34.6 per cent less. Pointing categorically to retailers not passing on these sizable oil and wholesale falls to 37 million UK drivers and instead clearly using diesel as way to increase their forecourt profits.
In addition, since January 2015 wholesale diesel supplied to retailers has been higher priced than petrol on average for 30 weeks. At the pumps however, diesel drivers have been paying more than petrol for an average 49 weeks of the year.
In the last year diesel has averaged 114 pence per litre with petrol at 110 pence per litre. Based on the last five weeks’ average wholesale prices since 14th December, diesel prices should now be at least three pence per litre lower than petrol at the pumps. They are not!
This means retailers have not passed on at least £2.25 million of wholesale price cuts per day to diesel drivers, amounting to £83 million since 14th December or £75 per driver per year (Based on 75 million litres of diesel sold each day).
The government benefits too from the retailing profiteering, gaining additional VAT on these unfair levels of diesel prices to the tune of an extra £375,000 each day. So, sadly none of this retailer and government windfall money as a consequence is used in consumer spending.
Current retail margins, based on average wholesale reported prices at 20 January subtracted from average pump prices, show for diesel to be 11 pence per litre and petrol to be 5.8 pence per litre. On this basis diesel is being blatantly exploited even more starkly by over 5 pence more than the retail return on petrol (net of all tax). Equating to drivers of diesel cars being fleeced of £3.75 million each day in rightful price falls at the pumps.
In the last two weeks, oil in sterling has fallen 15.2 per cent, wholesale petrol (net of all taxes) dropped 7.3 per cent with retail falling just 0.7 per cent. Wholesale diesel has fallen in the same period 19.1 per cent but at the pumps only 6.1 per cent. Pointing to a long awaited start to the equalisation of diesel and petrol prices at the pumps.
My colleague Quentin Willson, TV motoring journalist and lead campaigner for FairFuelUK, commented: “Weeks and weeks of increased profits on every litre of diesel sold and weeks and weeks of not passing savings on to motoring consumers. And the fuel and oil industries want us to feel sympathetic?”
Everything about fuel pricing hits UK drivers hard at the pumps, from opportunistic profiteering suppliers holding onto beneficial recent oil price falls to the heinous 74 per cent taxation in Duty and VAT. We call on the Competition and Markets Authority and the government to investigate and stop this unparalleled greed plus deliberate exploitation of motorists and our vital haulage industry, whilst oil prices crash. It stinks!
• Portland Fuel Pricing for wholesale prices of petrol and diesel, oil prices and exchange rates
• https://www.gov.uk/government/statistical-data-sets/oil-and-petroleum-products-weekly-statistics%20 for weekly retail prices at the pumps
• RAC Foundation for weekly retail prices at the pumps at: http://www.racfoundation.org/data/uk-pump-prices-over-time
• Table at: http://www.fairfueluk.com/DieselRakeOff%20.jpg
• Raw data for the table is available at: http://www.fairfueluk.com/FairFuelUK_Rip_off_data_Jan_2015.xlsx
Posted on: January 22nd 2016