Why are diesel drivers subsidising petrol purchasers?

Do you drive a diesel vehicle or van? Well, watch out – you are possibly paying more than the odds for your fuel.

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

And that implies they are adding much more than £3 to the expense of filling up a diesel auto, or £4.80 for a van.

Cheques and balances

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

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

Oiling the wheels

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

And all this whilst wholesale oil costs 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 price of a barrel was just $ 55.70.

Rise and fall

So why are fuel prices going up although oil costs are falling on the international bourses?

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

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

Crude statistics

But it’s not that simple. Even though the oil cost has fallen when priced in dollars, the value of sterling has itself fallen against the dollar.

That signifies oil costs much more for UK processors and retailers.

The adjust in exchange rates has meant that, while £1 purchased you $ 1.511 in mid March, it got you just $ 1.481 in mid April.

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

Pump action

So it appears no-one is faring specifically effectively at the pumps at the moment (despite the fact that costs below £1.20 are still around 10% significantly less than this time last year).

But even the Petrol Retailers Association confirms that diesel drivers are being employed to subsidise their much more numerous petrol-purchasing counterparts.

A spokesman said: “Currently, the margin obtainable on petrol is extremely low – and so higher margins might be taken on diesel.”

Cutting remarks

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

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

But rather than calling for price tag cuts, the AA desires the politicians jostling for our votes to make both petrol and diesel pricing much 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,” stated Edmund King. “But the want for fair pricing on UK forecourts has so far been largely ignored by politicians. A commitment to pump price tag transparency would be a excellent start off.”

Why are diesel drivers subsidising petrol purchasers?