Why are diesel drivers subsidising petrol purchasers?

Do you drive a diesel auto or van? Effectively, watch out – you are probably 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 indicates they are adding more than £3 to the price of filling up a diesel car, 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 standard expense of a litre increasing from 111.92p in mid March to 113.29p in mid April.

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

• In the initial 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 rates going up whilst oil rates are falling on the international bourses?

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

Following all, the expense of filling up a 55-litre petrol tank has shot up by 75p in the final month. And since 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 straightforward. Even although the oil cost has fallen when priced in dollars, the value of sterling has itself fallen against the dollar.

That indicates oil charges far more for UK processors and retailers.

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

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

Pump action

So it seems no-one is faring particularly well at the pumps at the moment (despite the fact that costs beneath £1.20 are still about 10% less than this time last year).

But even the Petrol Retailers Association confirms that diesel drivers are becoming utilized to subsidise their more numerous petrol-acquiring counterparts.

A spokesman stated: “Currently, the margin offered on petrol is extremely low – and so higher 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 prices to be cut by 4p a litre.

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

But rather than calling for price 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 need to have 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 start off.”

Why are diesel drivers subsidising petrol purchasers?