Northern Ireland petrol prices: Consumer Council supportive of RAC claim of 'galling' profit margin on forecourt petrol

The RAC says the average margin for retailers grew from 8.7p in 2021 to 13.5p in 2022, an increase of 55%. It stood at 6.5p before the pandemic, meaning it has doubled in just three years.

RAC fuel spokesman Simon Williams said: “This is a galling situation for drivers who are struggling more than ever given the impacts of the wider cost-of-living crisis.

“The question now is whether retailers start to bump up their prices. This will depend on whether they decide to continue enjoying larger margins or let them return to more normal levels.

“Looking at current wholesale costs there is absolutely no justification for pump prices to rise."

He urged the Government to focus on ensuring retailers quickly pass on savings to drivers every time there is significant downward movement in the wholesale price of fuel.

The analysis backs up a report by competition watchdog the Competition and Markets Authority published last month, which said drivers were the victim of “rocket and feather” pricing in 2022.

Business Secretary Grant Shapps wrote to fuel retailers on December 22 urging them to “ensure savings are passed on to consumers” after it emerged drivers were being hit by record Christmas getaway fuel prices.

Richard Williams, Head of Transport at the Consumer Council in Northern Ireland, said there was some evidence of petrol retail prices shooting up like a rocket when wholesale prices rise, but dropping like a feather when they fall.

“The Competition and Markets Authority (CMA) is currently investigating the UK fuel market and in its initial report in December 2022, reported some evidence of 'rocket and feather' pricing emerging last year, particularly for diesel," he said.

"The Consumer Council believe that fuel retailers must pass on falls in the wholesale price of fuel as quickly as they pass on increases. The CMA also reported there is reason to suspect that retail margins have increased over the past five years, but that its investigation of the wholesale sector, which buys fuel from domestic and overseas refiners to sell on to retailers, is at an early stage.”

Just over a week ago the chairman of Tesco John Allan told the BBC that some food firms may be using inflation as an excuse to hike prices further than necessary.

Asked if food producers were taking advantage of the poorest in society, John Allan said it was "entirely possible". He said Tesco was trying "very hard" to challenge price hikes it thinks are illegitimate.

NI economist Dr Esmond Birnie said we are “still in the midst of the fog of war” on petrol margins until very detailed cost data becomes available.

“That said, the CMA’s judgement on UK wide pump prices remains relevant. There is some evidence that prices ‘rocket up’ when global oil prices go up but only float down quite slowly when the global oil market becomes more favourable. Consumers should shop around; the Consumer Council’s online tracker of petrol and diesel prices is very useful, one advantage we have here in NI relative to England.”

See: https://www.consumercouncil.org.uk/fuelpricechecker/tool