‘The price of petrol at the pump is influenced by more than just the price of crude oil, so recent claims that forecourt retailers are not reducing the price of fuel at the pump fast enough to match the drop in the crude price are laughable,’ said Ray Holloway, Director of the RMI’s Petrol Retailers Association (PRA), commenting on recent comments made about fuel pricing.

Other factors impact on the price of fuel even before the forecourt buys it for sale to the motorist. Holloway explains: ‘There are complex pricing mechanisms that affect the value of crude oil, and once it has been refined into fuel and is in the supply chain, a number of differing commercial agreements between supplier and retailer affect it again. The recent comments made on retail pricing and profitability ignore these additional commercial pressures.’

UK Government taxes also have an impact on the price: ‘The UK’s fuel would be among the cheapest in Europe, if Government taxes were reduced to levels comparable to those borne by our continental neighbours.’

Paradoxically, the UK’s forecourt market is among the most competitive anywhere. Unfortunately it is also one of the least profitable for retailers. Holloway explains: ‘Retailers must keep prices as low as they can, while facing fixed operating costs. They work in a challenging business area, with high costs and very low returns. Most are kept afloat by the shop attached to their site.

‘Around 400 filling stations shut down across the UK every year, and motorists are now noticing gaps in fuel availability. Since the fuel protests in 2000, one third of the filling stations open at the time have disappeared.’

Holloway adds: ‘Retailers always sell fuel at the most competitive price they can manage, and will pass on any savings to the motorist as soon as possible. It is in their interest to do so.’