RAC: Fuel prices could rise again as forecourts continue to charge higher prices
Wholesale fuel prices have slowly risen, but how much will you pay now and how can you save on the costs of driving?
Petrol prices have come down from their record highs seen in the summer with prices at the pumps now at an average 148p per litre. But be warned, they could soon start creeping up again.
According to the RAC’s fuel price watch, current average petrol and diesel prices are:
- Unleaded – 148.89
- Super unleaded – 164.60
- Diesel – 170.37
The RAC argued that these prices should be lower as wholesale costs dropped at the end of 2022, but fuel providers have not passed on the savings to customers.
Wholesale prices have slowly crept up in recent weeks, creating an opportunity for forecourts to provide a level playing field by stalling their prices, but the RAC argues that this is instead likely to see an increase in petrol and diesel prices at the pumps.
"Over a nine-week period between mid-October and mid-December 2022, wholesale petrol costs tumbled by 23p per litre, but the average pump prices took almost another month to fall by a total of just 18p, after peaking at 166.54p at the end of October," the RAC stated.
"This was to a large extent influenced by supermarkets not cutting their prices far enough or soon enough – they only reduced their prices by 20p over this period."
For diesel owners, it is worse; wholesale prices plummeted by 32p a litre over eight weeks, but the average pump prices only came down by 20p a litre, after most recently peaking at 190.41p a litre at the end of October.
It is also important to note that although prices have come down from the highs seen in the summer, prices still remain relatively high compared to what we were paying in 2021. There is also a risk that these prices will creep up as whole sales prices start to slowly rise again.
"The fear now is that retailers waste no time in putting pump prices back up despite there being no justification for doing so," RAC stated.
"By not fully reflecting wholesale price drops and keeping pump prices artificially high, retailers make more money out of drivers from every litre they sell. RAC analysis shows that in 2022, the average retailer margin on petrol was 13.5p a litre (supermarkets 10.8p), significantly higher than the 8.7p it was in 2021 (supermarkets 5.8p). The average diesel margin last year was 10.3p (supermarkets 7.5p), up from 8.8p in 2021 (supermarkets 6p). Prior to the pandemic, in 2019 average retailer margins were just 6.5p for petrol and 6.9p for diesel."
How to save on fuel prices
Spending a little time researching petrol prices in your area can help you find the cheapest fuel and can save you money. It may be convenient to fill up at the first petrol station you see on your way back home, but it is a good idea to check prices as you drive by to see which are the cheapest – supermarkets are often the most competitive.
There are many websites and apps that can help you find the cheapest fuel. Our sister website GoCompare has a useful tool which will show you the cheapest spots to buy petrol and diesel in your area. You just need to enter your postcode and the type of fuel you are purchasing to access the best prices.
PetrolPrices.com is another site worth looking at to find out the cheapest fuel in your area.
Make use of loyalty cards and cashback schemes
Another advantage of filling your car at supermarket forecourts is the savings you can make with a supermarket loyalty card.
A number of UK supermarkets, including Tesco and Sainsbury’s, offer various cashback incentives on fuel.
The Tesco Clubcard scheme gives you one point back for every £2 spent on Tesco fuel. And for every 150 points earned, you are rewarded with £1.50 worth of Clubcard vouchers. The points can also be earned at Esso stations, you can earn one point for every £3 spent if the Esso station also has a Tesco Express shop.
And Sainsbury’s Nectar card gives you one point for each litre of fuel purchased at Sainsbury’s petrol stations.
Avoid “premium” fuels
Using premium fuel with a higher octane rating can also push up the price of your fuel bill – it can be 10p to 15p more expensive per litre compared to normal fuel..
According to the RAC, premium fuel may be necessary for certain high-performance cars, but “in most cars any benefits are negligible”. So unless you really need it, stick to regular fuel.
Stick to the speed limit and drive more efficiently
Sticking to the speed limit doesn’t just avoid you getting fined, it can help keep fuel costs down too. Driving at higher speeds uses more fuel as
Drive more conservatively and avoid accelerating and braking hard. The RAC’s Simon Williams says abandoning the “heavy right-foot habit” can reduce your fuel consumption.
“There is no one driving speed that is optimum for fuel economy,” he says”, but gentle acceleration and deceleration and keeping a consistent speed within the speed limit makes for fuel-efficient and safe driving."
Check your tyre pressures
Using under-inflated or over-inflated tyres can lead to higher fuel consumption so it's important to check your tyre pressure.
You can easily check your tyre pressure either online using the TyreSafe website.
Alternatively, your car’s manual will tell you, and in many cars the recommended tyre pressure can be found on a plate attached to the driver’s door sill.
You can check and top up your tyre pressure at petrol stations for a nominal fee.
Drag, air conditioning and open windows
Choosing when to use air conditioning instead of opening the window also affects fuel economy. It is usually more efficient to open windows when driving at lower speeds compared to using air conditioning.
But using air conditioning when driving at higher speeds is usually more cost-effective as opening windows at those speeds can cause significant drag, which increases fuel consumption.
Unless it is absolutely necessary, don’t drive with roof boxes or bars attached to your car. These will significantly increase drag and lower your fuel efficiency.
Keep your car well maintained
Making sure your car is regularly maintained will reduce surprise bills in the future. A newly service car will typically run more efficiently and use less fuel.
As Ryan Fulthorpe, GoCompare’s motoring expert, points out, regularly servicing your car will “pay dividends when it comes to fuel consumption”.
“Change the air filter regularly, ensure your fuel cap has a good seal, and check and change the oil, as well as getting your fuel injectors cleaned,” he adds.
SEE ALSO:
The cost of petrol in the UK compared with the rest of the world
What makes up the price of a litre of petrol?
Why petrol prices are higher than in 2008, despite lower oil prices now