The cost of diesel fuel at British pumps is currently averaging at 155p per litre, which is five pence more expensive than the prices seen in Ireland and Belgium who are charging 150p per litre. Interestingly, these two countries impose slightly higher taxes on fuel compared to the UK, with rates being between one and two percent higher. This has sparked confusion among consumers as well as industry experts who have questioned why retailers in Great Britain aren’t reducing their prices at the pumps.
Simon Williams, a spokesman for RAC Fuel Watch, expressed his frustration on Wednesday, noting that calculations show the average retailer margin on diesel – the difference between the delivered wholesale price and the retail price before VAT – is 18p, which is an astonishing ten pence more than the long-term average of 8p. This indicates a potential for retailers to cut their prices significantly without causing financial strain.
The latest European data on fuel prices shows that France has a duty rate only one penny lower than the UK (52p) but its average price for diesel is nine pence less at 146p. Despite this, little action has been taken in the UK to address the high prices of diesel. RAC has even contacted Energy Secretary Claire Coutinho regarding this issue, although there have not been any significant changes yet.
Mr. Williams remarked on the situation, stating that having the most expensive diesel in Europe despite the current 5p duty cut is a very dubious honour. He further explained that the average price for a litre of diesel should ideally be around the 145p level if retailers were to charge fairer prices, and highlighted that the margin on petrol is also unreasonably high at 13p.
In Northern Ireland, where there is greater competition for fuels in the absence of supermarket dominance, the average price of diesel is just 144.9p – ten pence less than the UK average, and petrol is 6p cheaper at 142.4p. This indicates that there might be some hope for fairer fuel prices in the future.
The Digital Markets, Competition and Consumers Act became law on Friday, giving new powers to the Competition and Markets Authority to closely monitor road fuel prices and report any sign of malpractice to the government. While duty on both petrol and diesel was cut by 5p in spring 2022 to combat rapidly rising fuel prices following Russia’s invasion of Ukraine, the UK still has the highest rate of duty on diesel in Europe alongside Italy. However, the price of diesel in Italy averages at 148p a litre – seven pence cheaper per litre than in the UK.
The Epoch Times contacted the office of Claire Coutinho, secretary of state for energy security and net zero, seeking comment on this issue.