Pressure on fuel retailers as prices rise despite tax cut

Fuel retailers are under fresh pressure from Downing Street to pass on tax cuts to motorists as diesel prices hit a new high.

By The Newsroom
Tuesday, 17th May 2022, 6:47 pm
File photo dated 15/08/13 of a person using a petrol pump: Nick Ansell/PA Wire
File photo dated 15/08/13 of a person using a petrol pump: Nick Ansell/PA Wire

Business Secretary Kwasi Kwarteng has written to the industry “to remind them of their responsibilities” following claims retailers hiked profits following the 5p per litre fuel duty cut.

Figures from the Department for Business, Energy and Industrial Strategy show the average price of a litre of diesel at UK forecourts was 179.7p on Monday.

That was up from 178.4p a week earlier.

The average price of petrol on Monday was 165.1p per litre.

That was narrowly below the record of 165.4p set on March 21, based on the Government’s figures.

Separate fuel price statistics published by the Northern Ireland Consumer Council show that the average cost of a litre of diesel here is 176.9p, and for petrol the average price is 163.5p.

Both figures, published on Thursday, are up on the previous week’s averae prices.

Chancellor Rishi Sunak implemented a 5p per litre cut in fuel duty on March 23 to help cash-strapped motorists across the UK.

But the RAC said retailers are taking an average profit of 2p per litre more than before the policy was introduced.

The firm’s analysis showed the average margin for a litre of petrol and diesel is currently 11p and 8p respectively.

In the month up to the duty cut it was 9p for petrol and 6p for diesel.

In his letter, Mr Kwarteng said the British people are “rightly expressing concern about the pace of the increase in prices at the forecourt”, and are “rightly frustrated that the Chancellor’s fuel duty cut does not appear to have been passed through to forecourt prices in any visible or meaningful way”.

“It is also unacceptable that different locations even within the same retail chain have widely different prices,” he wrote.

Meanwhile, Rishi Sunak and his Treasury ministers have suggested new measures to help ease cost-of-living pressures are being developed but will not be introduced imminently.

Chief Secretary to the Treasury Simon Clarke said the Chancellor will bring forward a programme of measures at a time when they will “make the right difference in a targeted way”. Mr Sunak later said he “stands ready to do more” but said this is part of a “broader plan”.

The Office for National statistics recorded inflation at 7% in March and on Wednesday it is expected to report 8% for April.