Why are diesel drivers subsidising petrol purchasers?

Do you drive a diesel automobile or van? Nicely, watch out – you’re almost certainly paying more than 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 much more than £3 to the cost of filling up a diesel auto, or £4.80 for a van.

Cheques and balances

Edmund King, AA president, stated: “Cars are like blank cheques for whoever feels the want 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 rates are also on the up, with the common expense of a litre increasing from 111.92p in mid March to 113.29p in mid April.

And all this whilst 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 costs going up although 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 cost of filling up a 55-litre petrol tank has shot up by 75p in the final month. And since February, petrol costs have risen 7p a litre – pumping up the expense of filling up by £3.50 a time.

Crude statistics

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

That means oil fees more for UK processors and retailers.

The change 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 signifies a $ 2.80-a-barrel fall in the oil price translates into a 1p-a-litre boost at wholesale level, which inevitably feeds by way of to the pumps.

Pump action

So it seems no-1 is faring specifically properly at the pumps at the moment (though costs beneath £1.20 are still around 10% much less than this time final year).

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

A spokesman mentioned: “Currently, the margin offered on petrol is extremely low – and so larger 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 reduce by 4p a litre.

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

But rather than calling for price cuts, the AA wants the politicians jostling for our votes to make both petrol and diesel pricing far 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 transparency would be a great start off.”

Why are diesel drivers subsidising petrol purchasers?