Drivers across England are encountering significant retail charges of 64p per litre when refueling at leading supermarket chains, according to recent reports. This expense is distinct from the considerable government taxes applied to fuel, highlighting the financial pressures on motorists.
Understanding Fuel Pricing Components
Fuel retailers determine pump prices based on the wholesale costs of petrol and diesel. However, the RAC notes a typical two-week "lag" before pump prices adjust to reflect changes in wholesale prices. This delay occurs due to the time required for fuel to move through the supply chain to forecourts.
The total retail price at the pump includes a substantial tax burden: 57.95p per litre in fuel duty plus 20% VAT. Consequently, over 60% of the price paid by drivers goes directly to the Treasury. When combined with car tax and "showroom" tax, this totals more than £40 billion annually.
Current Supermarket Fuel Prices
The average supermarket petrol price among the Big Four retailers—Asda, Morrisons, Tesco, and Sainsbury's—currently stands at 129.4p per litre. For motorists filling up at these brands, this translates to 52.95p after accounting for the 5p fuel duty cut, plus an additional 10.59p from VAT.
This results in drivers facing a 64p per litre charge to the retailer alone, excluding all government taxes. The RAC emphasizes that prices can vary dramatically between regions and even within towns just a few miles apart.
Regional Variations in Fuel Costs
Fuel prices are influenced by local factors, sometimes making rural locations cheaper than urban areas. This can occur if a site is closer to a fuel storage terminal or refinery. Local retail dynamics also play a crucial role in pricing strategies.
Prices are often driven by the presence of supermarkets competing aggressively on price or independent forecourt retailers determined to offer the cheapest fuel. If local supermarkets do not engage in strong price competition, motorists may end up paying more.
The RAC adds that petrol prices can fluctuate significantly over short distances. To help drivers, all registered users—whether RAC members or not—can quickly search within two, five, or ten miles to ensure they always access the cheapest available fuel in their area.
