UK diesel prices are rigged - AA
UK diesel drivers are again being ripped off says the AA. The wholesale price gap between petrol and diesel is much closer than the current forecourt price suggests: diesel is 4.4p more expensive than petrol.
Yet the AA claims diesel has actually been cheaper wholesale than petrol for some of this year: the real price difference between petrol and diesel is, frankly, buttons.
Derv cheaper than petrolUK wholesale prices between 21 March and 18 April this year, claims the AA, saw diesel prices range from the same price as petrol to up to 2p a litre cheaper. But throughout April, diesel remained at least 5.4p a litre more expensive than petrol at the pump - forcing diesel drivers and businesses to spend at least £2.5 million a day extra on fuel, says the AA.
Since then, despite diesel again becoming cheaper than petrol in the wholesale market, diesel remains at least 4p a litre pricier than petrol at the pump. The Office of Fair Trading has already announced an investigation into oil and fuel markets with a report due next year.
One step towards improved price clarity would be for the British government to publish wholesale prices. "If the EU can publish a weekly track of petrol and diesel wholesale prices in euros per tonne," says the AA, "why can't the UK government publish an equivalent in pounds per tonne or pence per litre on one of its websites?"
Competition concernIt adds: "It doesn't need an investigation, or permission of the fuel retailers or suppliers, just a form that can be understood by the public and business to ensure a fair price for all parties."
However the OFT told AOL Money it was not committing itself to any remedies regarding fuel pricing for the moment - including the publishing of wholesale fuel prices. "What we're doing is launching a call for information in an attempt to try and find out whether there are any competition concerns that need addressing," OFT spokesperson Frank Shepherd said.
"Before we look for remedies, we have to establish what the problems is, if any, that might need addressing. Currently, it's competition problems people have told us that are happening and whether pump prices are reflecting in crude oil prices."
"There's a suggestion that when crude oil prices rise, pump prices rise quickly but when crude oil price comes down, prices come down more slowly."
Longer term realityNormally when global growth slows - as it has - so falls the price of oil. Yet the oil price has risen in recent months (at the time of writing the price of Brent Crude is currently around $108). Some of this concern is due to reserve levels.
Oil exploration is high expense and high risk. BP had its most recent scare earlier last week, off the coast of Norway with a substantial oil and gas leak on a production platform.
Couple that to investor timidity and money supply problems and it's not surprising exploration has slowed. Meanwhile emerging markets are taking up much of the slack that might have previously reflected a fuel price lull.
So get used to paying more at the pump. Especially if the Coalition fails to take on the oil giants.