Fuel retailers in the UK have been accused of a “classic example of rocket and feather pricing” as the cost of petrol hit a record and the cost of living crisis continues to escalate.
Significant reductions in wholesale costs for petrol mean companies have a “clear opportunity” to stop continuously raising pump prices, the Royal Automobile Club (RAC) said.
The high prices come at a time when inflation is at a 40-year high of 9.1 per cent, driven by increasing energy and food prices.
Data company Experian said the average price of a litre of petrol at UK forecourts hit a high of £1.91 on Sunday.
Diesel prices reached a record of £1.99 a litre on Saturday, before dropping slightly to £1.98 a litre a day later.
Twelve months ago, diesel cost £1.33 a litre while petrol cost £1.31.
The Competition and Markets Authority launched a “short and focused review” of fuel prices earlier this month after a request by Business Secretary Kwasi Kwarteng.
The concept of rocket and feather pricing for fuel involves retailers quickly raising pump prices when the cost of oil rises, but being slow to pass on the benefits of decreases in oil prices.
RAC fuel spokesman Simon Williams said: “We are struggling to see how retailers can justify continuing to put up their unleaded prices as the wholesale cost of petrol has reduced significantly.
“This is, sadly, a classic example of rocket and feather pricing in action, and one which the Competition and Markets Authority will, no doubt, be looking at very closely.
“It seems as if retailers are making matters worse for themselves by not lowering their forecourt prices despite having a clear opportunity to do so.”
“The only explanation of retailers’ resistance to reducing prices is that they are protecting profits in case of wholesale costs suddenly going back up.
“Ultimately, the longer they hold out, the more they benefit and the longer the misery continues for drivers struggling with the high prices.”
About 45 per cent of Britons said they have cut back on car journeys over the past two weeks after seeing a surge in fuel prices, recent figures show.
The Office for National Statistics said the number of households reporting a rise in living costs had increased and that 91 per cent of Britons had seen a rise in the overall cost of living over the period through to June 19 as food, energy and fuel all weighed on consumers.
A fuel duty reduction of 5p a litre introduced by the Treasury in March has not stopped prices from increasing.
The government has resisted demands for another, deeper cut to help motorists.
Automobile Association president Edmund King said “crippling” pump prices could “stifle summer staycations” at a time when airports are struggling to cope with demand.
He called on the government to “urgently take action on price transparency and cut duty levels”.
