Diesel drops below £1.50-a-litre for the first time in 15 MONTHS

The average diesel pump price has dropped below £1.50p-a-litre for the first time since 1 February 2022, meaning it is down 50p on the record highs drivers faced in July.

Today, diesel averages 149.45p per litre, having last been below the 150p mark on 1 February 2022 (149.99p a litre). 

However, 5p of the 50p decline is the fuel duty cut introduced by Rishi Sunak in March 2022 – which was extended by the Chancellor, Jeremy Hunt, in the spring Budget.

The AA said the big fall was still ‘not a cause for celebration’, adding that the economy continues to be ‘weighed down by historically high pump prices’.

Diesel peaked at 199.07p-a-litre on 1 July 2022, when filling a standard van’s 80-litre fuel tank cost an eye watering £159.26. 

This week, the cost to brim a Ford Transit-style commercial vehicle costs £119.56 – a saving close to £40-a-tank.

While a major boost to business and exerting downward pressure on transport costs and therefore inflation, diesel prices still remain higher than the pre-pandemic record of 147.89p-a-litre, which was set over a decade ago in April 2012.

This shows that UK drivers and the economy ‘remains weighed down by historically high pump prices’, it said.

The AA’s record also showed that petrol fell to 143.45p-a-litre on Wednesday – a level last seen in October 2021 and down 48p from the 191.53p peak at the beginning of July 2022. 

Pre-pandemic, the worst UK drivers had endured was 142.48p in April 2012.

Luke Bosdet, the AA’s fuel price expert, said: ‘You would think that a nearly 50p-a-litre crash in the diesel pump price would be a major cause of celebration. 

‘However, each week, AA members continue to vent their anger and frustration at the pump price variations that are dictated by where they live.’

Bosdet said one motorist contacted the AA highlighting that he’d paid 135.9p-a-litre for diesel at a supermarket in Wantage – only to drive some 40 miles south to Winchester to find the same supermarket chain charging 151.9p – a huge 16p-a-litre difference, which works out as an £8.80 difference when filling the tank of an average family car (55 litre tank).

‘Like so many drivers, he lashed out at ‘forecourt owners who have collectively and shamelessly deliberately pushed through an extra unreasonable uplift on already crushing price increases”, Bosdet said.

‘And so the UK diesel price scandal continues, and the Competition and Markets Authority judgement can’t come soon enough.’

It should be pointed out that 5p of the 50p decline since last summer is the fuel duty cut introduced by Rishi Sunak in March 2022 and extended by the Chancellor, Jeremy Hunt

News of diesel falling to a 15-month low comes just a week after the CMA released a statement saying it had found evidence of fuel retailers – particularly supermarkets – having hiked fuel prices more than needed to boost profit margins last year.

‘As a result of these increasing margins, average 2022 supermarket pump prices appear to be around 5p per litre more expensive than they would have been had their average percentage margins remained at 2019 levels,’ the CMA said.

It also has concerns about the ‘sustained higher margins on diesel compared to petrol’ so far this year, which ‘appear to have gone on longer than would be expected’.

The watchdog’s chief executive, Sarah Cardell, said it was not satisfied with evidence from supermarkets, so will be calling them for ‘formal interviews to get to the bottom of what is going on’.

In 2019, the average margins were 6.5p for every litre of petrol and 6.9p for diesel, the RAC says.

The calculation on current prices shows retail margins on unleaded are 9.9p per litre, which is around 7 per cent of the total cost of fuel.

The average margin on diesel is three times bigger than it was pre-pandemic, up to 21.1p per litre and accounting for 14 per cent of the total price consumers pay.

The CMA’s full report is set to be published by the beginning of July.