Why are diesel drivers subsidising petrol purchasers?

Do you drive a diesel car or van? Effectively, watch out – you’re most likely paying over the odds for your fuel.

Garages and forecourts have been accused of hiking the price tag of diesel by up to 6p a litre to make up for poor margins on petrol sales.

And that means they are adding far more than £3 to the expense of filling up a diesel car, or £4.80 for a van.

Cheques and balances

Edmund King, AA president, stated: “Cars are like blank cheques for whoever feels the need to balance the books by plundering drivers’ pockets.

“And now the fuel retailers are taking £3-a-tank extra on diesel to steady their finances.”

Oiling the wheels

Petrol prices are also on the up, with the standard price of a litre increasing from 111.92p in mid March to 113.29p in mid April.

And all this although wholesale oil rates continue to fall!

• In the 1st 2 weeks of March, oil averaged $ 58.50 (£39.31) a barrel.

• In the opening fortnight of April, the expense of a barrel was just $ 55.70.

Rise and fall

So why are fuel prices going up while oil rates are falling on the international bourses?

Does it prove that retailers are cashing in on each petrol and diesel drivers?

Right after all, the price of filling up a 55-litre petrol tank has shot up by 75p in the last month. And since February, petrol costs have risen 7p a litre – pumping up the cost of filling up by £3.50 a time.

Crude statistics

But it is not that straightforward. Even though the oil price has fallen when priced in dollars, the worth of sterling has itself fallen against the dollar.

That means oil expenses more for UK processors and retailers.

The change in exchange prices has meant that, although £1 purchased you $ 1.511 in mid March, it got you just $ 1.481 in mid April.

In, er, crude terms, that means a $ 2.80-a-barrel fall in the oil value translates into a 1p-a-litre improve at wholesale level, which inevitably feeds by way of to the pumps.

Pump action

So it seems no-a single is faring particularly nicely at the pumps at the moment (although costs below £1.20 are nonetheless around 10% less than this time final year).

But even the Petrol Retailers Association confirms that diesel drivers are being utilised to subsidise their more quite a few petrol-getting counterparts.

A spokesman stated: “Currently, the margin obtainable on petrol is extremely low – and so larger margins may be taken on diesel.”

Cutting remarks

The RAC, which has accused fuel retailers of taking diesel drivers for a ride, is calling for diesel prices to be cut by 4p a litre.

Simon Williams at the RAC mentioned: “Retailers have maintained a higher margin on diesel, maybe to subsidise petrol sales.”

But rather than calling for cost cuts, the AA wants the politicians jostling for our votes to make both petrol and diesel pricing more transparent for the UK’s 35 million drivers.

“Motorists prop up the Treasury to the tune of 10% of the UK’s total £582.6 billion tax-take,” said Edmund King. “But the need for fair pricing on UK forecourts has so far been largely ignored by politicians. A commitment to pump price tag transparency would be a great begin.”

Why are diesel drivers subsidising petrol purchasers?