Petrol should be 6p per litre cheaper than it actually is, the RAC has said. 

The road side assistance business has called on forecourts to lower their prices to reflect the fact that wholesale prices on crude oil have been falling since the start of July.

It believes the recent fall in the price of oil and the strengthening of the pound – the two biggest factors in determining the wholesale price of petrol and diesel – are not reflected in the current price of fuel.

The average price of petrol in the UK is currently 142p a litre. However, data from RAC Fuel Watch shows the delivered wholesale price of petrol averaged 103p a litre last week. 

Allowing for a retailer margin of 10p – 2p more than the long-term average of 8p, this should lead to average petrol prices of just under 136p including VAT, RAC argued.

Diesel should be being sold for 139p, rather than the current average of 147p.

RAC analysis reveals that the UK has now had the questionable honour of having the most expensive diesel in Europe for 16 of the last 17 weeks, and that’s even with a 5p fuel duty discount.

RAC head of policy Simon Williams said: “The biggest retailers’ refusal not to reduce their prices to fairer levels is continuing to cost drivers dear. 

“It is all the more outrageous when you factor in that we’re all meant to be benefitting from a temporary 5p cut in fuel duty, that looks likely to disappear in the coming months. 

“While the Competition and Markets Authority has clearly stated drivers were overcharged last year, it’s blatantly apparent from our data that this problem is persisting this year.

“If prices don’t fall dramatically in the next week or so, we believe the government and the CMA should get all the biggest retailers together to demand an explanation. Tough action needs to be taken to change this as drivers are losing out badly every time they fill up. 

“Artificially high pump prices also contribute to a higher level of inflation – so if prices were nearer where they should be, inflation would be lower, benefitting borrowers and the wider economy.”