The average diesel price in the UK fell by 12p a litre in May, making it the largest monthly cut ever seen in the RAC’s Fuel Watch tracker since it began in 2000.
Data from RAC Fuel Watch shows diesel fell from 158.91p to 146.99p cutting the cost of a full 55-litre family car fill-up by £6.50 while petrol reduced by 3p from 146.35p to 143.26p – a saving of £1.70 a tank compared to the start of the month.
May was the seventh consecutive month in which pump prices fell. This means diesel is now 52p lower (£28.60 a tank) than the all-time high of 199p last summer and unleaded is 48p lower (£26.40 a tank) than its record of 191.5p.
Diesel price drop is long overdue
While the diesel price drop may be record-breaking, the RAC argues that the reduction is both long overdue and smaller than it should be, given the wholesale price of diesel has been lower than petrol for 10 whole weeks.
After repeatedly calling for lower prices for months, the motoring organisation says it seems ironic that the latest price cuts have finally come in the two weeks following the Competition and Markets Authority’s announcement that it would be interviewing supermarket bosses about their fuel margins increasing significantly compared to four years ago.
The RAC believes the diesel price overcharging scandal is further highlighted by the fact that the average price of a litre in Northern Ireland is just 138.49p – which is 8.5p lower than the average across the whole of the UK. Even at the end of April, the average price drivers in Northern Ireland were paying for diesel was 153p which, at the time, was 10p lower than the rest of the UK.
Supermarkets drive reductions
May’s record single-month diesel price reduction was clearly led by the big four supermarkets as they brought their prices down by nearly 14p a litre (13.73p) to the point where a litre now costs an average of 142.96p (down from 156.69p). But they only shaved 2.4p off petrol (142.96p to 140.57p) in contrast to the UK average which reduced by 3p.
Asda finished May selling the cheapest diesel at 143p a litre – yet this is still 4.5p more than the average diesel price across all forecourts in Northern Ireland. It also had the lowest price petrol at 139.89p – almost identical to the price being paid by drivers in Northern Ireland where supermarkets are not as dominant in fuel retailing.
Noticeably, some supermarkets are now selling diesel at a cheaper price per litre than petrol, a situation not seen in the UK since 2007. As sales of new diesel vehicles in the country have plummeted in recent years, not as many drivers will benefit compared to 16 years ago.
“After calling for big pump price cuts for weeks we were pleased to see that May was the month where this finally happened,” RAC fuel spokesman Simon Williams said. “The fact it appears to have been prompted by the Competition and Markets Authority’s mid-month announcement about weakening competition in fuel retailing is surely not a coincidence.
“A 12p reduction in the diesel price in one month is something we haven’t seen in nearly 23 years of monitoring prices. But despite this, it is still galling to see that a litre of diesel is 8.5p cheaper in Northern Ireland than it is in the rest of the UK. This points to a more transparent and competitive fuel market there, something drivers in the rest of the UK would very much like to see, particularly with money being so tight in the cost-of-living crisis.
“What has happened to the price of diesel in May will no doubt give the CMA something to think about. We strongly hope the pump price reductions continue as they should. If greater transparency returns to the market, we ought to be heading for an average diesel price of 137p, similar to what drivers are paying in Northern Ireland – and a price the UK as a whole has not seen since September 2021.”