Skyrocketing Gas Prices Crushing Small Businesses, Experts Say

The average price of petrol was 191.27 pence a liter on Wednesday while diesel stood at 198.84 pence.

RAC spokesman Simon Williams said: “Surprisingly, despite another day of falling wholesale prices, average fuel prices on Wednesday remained close to record levels. The refusal of the larger retailers to cut prices now is unbelievable.”

The government asked the Competition and Markets Authority to investigate fuel retailers last month for failing to approve a 5p tax cut for shoppers on the esplanade.

Williams said: “The Competition and Markets Authority should really consider delaying the release of its report further, as this period is one of the best examples of retailers postponing price cutting in a rapidly falling market to the detriment of the drivers.

“We can only hope that supermarkets are about to announce their biggest price cut in history. We remain ready to be surprised.”

The RAC said pump prices should be closer to 183 pence a liter for petrol and 194 pence for diesel based on last week’s wholesale prices.

Weekly wholesale costs paid by retailers have been falling for five straight weeks, experts said.

Jack Cousens, director of road policy for the AA, said: “There are some incredible service yards, like Texaco in Farnham, who sell their petrol at 186.9 pa litre, which is where the average price should be.

“That compares with a national average of 191.3 pence and the high street supermarket of 191.9 pence.

“Those mavericks are few and far between, even if it shows the other fuel traders that being competitive once again won’t kill them.

“However, it could keep rural drivers, low-income workers and small businesses from falling off a financial cliff.”

JACK COUSENS COMMENTARY

Pump prices in the UK are broken, and have been since the first weeks of the pandemic.

Even in the early part of the lockdowns, when the price of oil plummeted as the global economy slowed and wholesale costs fell as well, “cost-cutter” supermarkets vied with each other to announce cuts in pump prices. as they had for months. .

That forced other supermarkets to start cutting their prices, which then dragged down what other gas stations were charging.

But that trigger that led to lower prices is now gone.

As wholesale prices plummeted throughout 2020 and early closings, only half of the potential savings was passed on to motorists.

In the run-up to the fuel tax cut on March 23, wholesale gasoline prices had already fallen substantially. And, since the Jubilee bank holiday, wholesale petrol has fallen 5 pence a liter until mid-June, and then another 5 pence a liter since then.

But, only now has the UK fuel trade as a whole begun to cut prices at the pumps, reluctantly.

There are some amazing concourses, like the Texaco in Farnham which sells its petrol at 186.9 pa liter (which is where the average price should be).

That compares with a national average of 191.3 pence and the supermarket down the street that sells yours at 191.9 pence.

However, those mavericks are few and far between, even if it shows the other fuel traders that being competitive once again won’t kill them.

However, it could keep rural drivers, low-income workers and small businesses from falling off a financial cliff.

So why wait for her?

Could it be that some supermarkets are more determined to impose Aldi-equivalent store prices on their customers than to cut pump prices when the opportunity presents itself?

Or is it the comfortable relationship between supermarket and non-supermarket service yards in cities where the pump price postcode lottery adds another 3p or 4p to the litre? A kind of ‘if you don’t move, we don’t move on price cuts’.

Or is it a carbon copy of what happened in March? Talk about a fuel tax cut that suggests to retailers that if they delay lower prices long enough, the Chancellor will give them the means to do so?

  • Jack Cousens is AA’s Head of Highway Policy

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