Why are diesel drivers subsidising petrol purchasers?

Do you drive a diesel automobile or van? Properly, watch out – you’re possibly paying over 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 means they are adding much more than £3 to the expense of filling up a diesel automobile, 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 have to balance the books by plundering drivers’ pockets.

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

Oiling the wheels

Petrol costs are also on the up, with the standard expense of a litre rising from 111.92p in mid March to 113.29p in mid April.

And all this even though wholesale oil costs continue to fall!

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

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

Rise and fall

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

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

Right after all, the expense of filling up a 55-litre petrol tank has shot up by 75p in the last month. And given that February, petrol prices 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 although the oil price tag has fallen when priced in dollars, the value of sterling has itself fallen against the dollar.

That indicates oil costs a lot more for UK processors and retailers.

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

In, er, crude terms, that indicates a $ 2.80-a-barrel fall in the oil price translates into a 1p-a-litre increase at wholesale level, which inevitably feeds through to the pumps.

Pump action

So it seems no-one is faring especially nicely at the pumps at the moment (although rates under £1.20 are still around 10% significantly less than this time last year).

But even the Petrol Retailers Association confirms that diesel drivers are getting used to subsidise their far more several petrol-getting counterparts.

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

Cutting remarks

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

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

But rather than calling for value cuts, the AA wants the politicians jostling for our votes to make each petrol and diesel pricing a lot 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 want for fair pricing on UK forecourts has so far been largely ignored by politicians. A commitment to pump value transparency would be a good start off.”

Why are diesel drivers subsidising petrol purchasers?