Forecourt robbery

Petrol prices hit record high as retailers accused of profiteering... but Rishi’s poised to freeze fuel duty

PETROL firms were accused of ripping off motorists last night after average pump prices hit an all-time record.

Forecourt profit margins have shot up by more than 40 per cent since the start of the pandemic.

Analysis by the RAC, said retailers were making around 8p per litre on average now – compared to about 5.5p last April, and 3.5p back in 2012.

Meanwhile, some individual forecourts appear to be cashing in by charging as much as £10 more than the national average for a tank of fuel.

It came as the average pump price for unleaded hit 142.94p a litre yesterday, nearly half a penny above the previous alltime record of 142.48p in April 2012.

Motoring groups branded it ‘a truly dark day’ for Britain’s 33million car drivers. The soaring cost of filling up will pile pressure on Chancellor Rishi Sunak not to increase fuel duty in tomorrow’s Budget. The levy has been frozen at 57.95p per litre for petrol and diesel since March 2011.

According to a Cabinet source last night, Mr Sunak is expected to freeze fuel duty for the 12th consecutive year.

The source told the Daily Mail the freeze was ‘all but certain’ because a rise would be ‘political suicide’ at a time when drivers face spiralling prices at the pumps.

Experts say the soaring wholesale price of oil is behind the bulk of the pump price surge. The cost of a barrel has more than doubled over the last year, from $40 to around $85 now. Some analysts predict this could pass $90 by the end of the year.

The cost of filling the typical 55litre tank in a family car is now £20 more than it was in May 2020, when the average petrol pump price plunged to 106.48p a litre in lockdown. The typical motorist fills up twice a month, meaning fuel bills have increased by around £40 a month over this period.

However, the RAC analysis showed retailers’ margins have also ballooned on average from about 5.5p a litre in April 2020 to around 8p now.

It comes after motorists were fleeced last year when the oil price crashed due to the pandemic but retailers failed to pass on the savings for months. They also increased their margins during the recent panic-buying fiasco. Industry bosses admitted margins have increased, but insisted they were necessary to claw back losses made during the pandemic.

Motoring groups warned some families are now having to cut back on other expenses, such as food and heating, to keep their cars running and make ends meet.

Howard Cox, of the campaign FairFuelUK, said: ‘Following the shock increase in National Insurance, the loss of £20 Universal Credit, the massive increase in energy prices, oil smashing past $85 and pump prices at their highest ever, any increase in Fuel Duty would be economically irresponsible, unwarranted and a betrayal of newly won Tory converts outside of London.’

The AA’s fuel supremo, Luke Bosdet, said: ‘For poorer motorists, many of them now facing daily charges to drive in cities, there is no escape. It’s a return to cutting back on other consumer spending, perhaps even heating or food, to keep the car that gets them to work on the road.’

RAC fuel spokesman Simon Williams said: ‘This is a truly dark day for drivers, and one which we hoped we wouldn’t see again after the high prices of April 2012.’

One filling station, the Gulf forecourt on Sloane Avenue in Chelsea, was charging 163.5p a litre for unleaded. Some motorway forecourts were charging similar prices. Average petrol pump prices climbed steadily last year between May and November, from 106.48p to around 114p a litre, but have ballooned since.

Although the soaring price of oil is the biggest factor, the RAC pointed out that it’s around 28 per cent lower now than in 2012, when the last pump price record was set. In 2012 the price of a barrel of oil was around $117, compared to $85 now.

Although the dollar to pound exchange rate means fuel is more expensive to buy on the wholesale market, this only accounts for some of the difference. Over the same period, retailer margins have gone from 3.5p a litre in 2012 to around 8p now, the RAC found.

Average pump prices for diesel are also nearing a record high, hitting 146.50p a litre over the weekend. This compares to the April 2012 record of 147.93p.

Brian Madderson of the Petrol Retailers Association, which represents independent forecourts, said profit margins had to be increased to re-coup losses made during the pandemic. He said: ‘We’re still only talking about 86 per cent of prepandemic sales volumes currently, which in terms of lost margins is still pretty brutal.’