Supermarkets have doubled the margin taken on fuel according to te RAC.

Since Russia invaded Ukraine, fuel proces have been on a roller coaster ride, recently dropping to pre-war prices.

However it has been acknowledged that supermarkets are using these financial gains to subsidise general in-store products and reduce the inflationary increases to essential household goods

Fuel forces

Prior to the start of the war in Ukraine, the big four supermarkets were making a margin of just under 5p (4.7p) a litre on fuel – 3.7p for petrol and 5.7p for diesel.

Since then, however, this has increased to 10p (9.3p for petrol and 10.8p for diesel).

RAC Fuel Watch data for 2022 shows that the margin on supermarket petrol climbed to almost 11p (10.8p) a litre. At one point it hit 20p in the weeks here pump prices rose to over  191p .

So far this year, according to RAC analysis, they have enjoyed an average margin of 15p on diesel. This is due to the wholesale price falling significantly and then not being fully passed on to drivers on their forecourts.

Profiteering

The wholesale price of diesel was below the wholesale cost of diesel for three months from the end of March. This led to  supermarket margins reaching a high of 23p a litre in May.

Back in 2016, the supermarket margin on a litre of fuel was 2.3p. This increased steadily to nearly 6p (5.7p) in 2019 and remained at that level through the pandemic years.

But in 2022 RAC Fuel Watch data shows it jumped by 54% to over 9p a litre and, even more worryingly, it is averaging at almost 11p this year.

 

Fuelling inflation

RAC fuel spokesman Simon Williams says “lower fuel prices were one of the main reasons for inflation falling to 7.9% last month”. However, Williams adds that the data clearly shows that this could have been lower still “had the supermarkets reduced their pump prices in line with cheaper wholesale costs”.

“The big four supermarkets have benefited considerably on the back of the dramatic wholesale market fluctuations” he states .

“They appear to have capitalised on petrol in the early months of the war by upping their margin by 5p a litre in 2022, while they have increased their margin on diesel by nearly 8p this year to 15p by putting off reducing their prices when the wholesale price tumbled.”

“Frighteningly, this is twice the average supermarket margin on diesel from 2019 to 2022,” he added.

Referring to “bloated margins”, he admits general costs have increased for the supermarkets. However, for millions of cash strapped motorists suffering the the ‘cost of living crisis, it makes for “difficult reading”.  “In short, this means everyone is paying more than they should be to a lesser or greater extent depending on where they live.”

Live choices

The Competition and Markets Authority (CMA) report earlier this month that showed supermarkets have overcharged drivers to the tune of £900 million last year.

It recommended a price monitoring body is set up. Furthermore, retailers are mandated to provide live prices for fuel finder apps.