Fuel retailers defend high costs at UK pumps after oil price drop | Petrol prices

Fuel retailers have dismissed allegations that they have been slow in cutting prices at the pump due to a recent drop in their own wholesale costs as petrol and diesel broke new records at UK service stations.

The chancellor, Rishi Sunak, is under pressure to cut the fuel tax during his spring statement on Wednesday, which is likely to center on the rising cost of living.

According to Experian Catalist figures, latest pressure on household budgets hit a new high of 167 pence per liter on Sunday, while diesel reached 179 pence.

Oil prices had soared in recent weeks after Russia’s invasion of Ukraine, but have since fallen slightly, prompting the AA to accuse fuel retailers of being tardy in passing the cut.

“Wholesale gasoline and diesel prices began to fall dramatically on March 9, but more than 10 days later, prices at the pumps continue to set new records,” said Luke Bosdet, an AA spokesperson.

“Even with oil prices recovering to $110 a barrel late last week, wholesale gasoline fell 12 pence a liter on Friday from its March 8 peak.”

Gordon Balmer, the executive director of the Petrol Retailers Association (PRA), which represents independent service station owners, said the criticism was unfair as wholesale petrol and diesel markets fluctuated, rather than falling in line with falling oil prices.

“The market is all over the place right now, it’s so volatile,” he said. “We’re not robbing the public.”

He said fuel retailers were making little or no margin on diesel because the high wholesale costs were not fully passed on at the pump.

While Sunak is under pressure to cut fuel taxes, experts argue such a move could disproportionately help wealthier people, pointing to research on the impact of such moves in the European Union.

The EU fuel tax cut will cost European taxpayers €9 billion (£7.5 billion), according to an analysis by campaign group Transport & Environment shared with The Guardian. It showed that the richest households would gain the most because they would drive more cars and have larger cars that use more petrol or diesel.

The richest 10% of EU households spent eight times more on fuel than the bottom 10%, while the UK showed a similar gap, they said.

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Griffin Carpenter, a car analyst at T&E, said: “EU governments claim to support Ukraine, but instead of taxing Russian oil, they are subsidizing it with €9 billion in taxpayers’ money.

“There are better ways governments can help people. We could now impose a tariff or tax on Russian oil imports.

“Instead of subsidizing the wealthy drivers of gas-guzzling cars, monetary aid could be distributed more fairly among families who really need it.”

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