The RAC has warned UK motorists that petrol and diesel prices could rise again after the cost of petrol fell by 5p a litre. Petrol is already around 157p a liter and diesel close to 188p, but the latest increase has yet to reach the courts, leaving motorists exposed to pump price manipulation.
The 5p-a-litre increase adds around £3.30 to the cost of filling up a small to medium-sized car. That may look modest at first, but for commuters, carers, van drivers, tradesmen and families who fill up several times a month, it quickly becomes another weekly expense rather than a one-time inconvenience. The confusing part for motorists is that oil prices can drop while pump prices still feel stuck. Gasoline does not move from crude markets to forward areas. It goes through refining, wholesale prices, currency effects, delivery costs, taxes and retail prices before it appears on the sign outside the petrol station. Pump prices had fallen from their peak in April, when petrol reached around 158p and diesel reached 191p a litre. The RAC warns that petrol and diesel prices are now back to their highest levels since the start of the Iran war, and prices may still have to rise.
Treating low oil prices as a guarantee of cheap fuel during the days is a chimera. Retailers sell gasoline at different wholesale prices, domestic competition varies, and diesel and gasoline don’t always go together. The Competition and Markets Authority said the recent rise in fuel prices was largely due to higher oil costs rather than a broad increase in retail margins. For the drivers, that means the pressure isn’t just that the front yards take up a lot of square footage. The main problem is that the cost of fuel around the world has changed in households. Sales margins have not disappeared as a problem. The CMA said margins had not changed since the dispute began, but it also received high scores among a number of retailers in March and said it would investigate the allegations. The watchdog also warned earlier that competition in the fuel market is weaker than it should be. For drivers, the role of the CMA is not very impressive but very useful: a constant fly in the market where the price gap in the area can be expensive. The watchdog says the significant local difference means drivers can save up to £9 on a tank of petrol or diesel by shopping everywhere. That saving is significant because the price at the pump is only one part of the household fuel problem. A family with two cars, long journeys or regular road trips could lose significantly more than £3.30 a month if they regularly top up on expensive sites. Fuel prices of close to £1.60 for petrol and close to £1.90 for diesel make regular payments more expensive.
Motor vehicle fuel remains one of the easiest (and most frustrating) ways to overpay. The AA pointed to a huge gap between car prices and A highway prices, meaning the same tank can cost more depending on where the driver stops. For families trying to control costs, location can be almost as important as the national average. Diesel needs more attention because its effect is not limited to diesel car owners. Vans, delivery firms, traders, taxis, agriculture and freight are heavily dependent on it. When those costs rise, businesses take the hit or pass it on through delivery charges, shipping costs, service prices and goods that cost more to transport. Households therefore feel the impact of fuel inflation in two ways. The first hit comes when they fill up the car. The second can come later with higher costs of services and products transported by road. That’s why the fuel price warning is in the household budget discussion, not just on the car pages.
The war in Iran has made the fuel market difficult for consumers to understand. Any hope of political success or safe shipping through the Strait of Hormuz could lower oil prices, while new disruptions could make wholesale costs rebound quickly. Indeed the so-called ‘Project-Freedom’ of the US has already been suspended after only one day. Drivers don’t need to trade in oil to feel the effect; they see when the total pump changes. Fuel Finder should make the market harder to hide from consumers. The government-backed program requires gas stations to share prices, allowing drivers to compare costs before filling up. It won’t cancel out the impact of higher oil, but better price visibility should make it harder for expensive platforms to rely on customers who don’t know there’s a cheaper option nearby. Drivers can do more than wait for prices to go away. Comparing nearby fields, avoiding road fills where possible, keeping tires properly inflated, removing unnecessary weight and combining trips can all minimize damage. None of these steps are exciting, but at current prices small practices have real value for money.
Businesses with vans or a mobile workforce should also treat fuel as a live expense line rather than an afterthought. A 5p-a-litre increase may seem small, but for many cars and repeated weekly fill-ups it could quickly become a problem. That’s especially true for small firms that can easily increase prices without losing customers. RAC’s warning is really about timing. Drivers may have seen prices drop slightly from April and thought the worst was over. Wholesale costs now suggest that the next trip to the courts may rise again.
A useful move is to act before the next pump price increase. Checking local prices, avoiding traffic stops and filling up where competition is strong won’t beat the oil market, but it can stop drivers from giving more than they need.
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