UK supermarkets have cut diesel prices by more than 7p per litre as the Competition and Markets Authority (CMA) warned it would investigate higher than necessary forecourt prices.
The breakdown service provider RAC found the average price of diesel is now 143.5p, in comparison to 151p two weeks ago and said that supermarkets had quickly cut prices, The Guardian reported.
Simon Williams, a spokesperson for the RAC, said: “Significant cuts to the price of supermarket diesel were long overdue as its wholesale price has been below petrol’s since the end of March.
“For two straight months it has cost retailers less to buy diesel on the wholesale market than it has petrol, yet they continue to charge more for diesel at the pumps.”
Earlier this month, the CMA said its investiagtion uncovered the average 2022 supermarket pump prices were around 5p per litre more expensive than they would have been had their average percentage margins remained at 2019 levels.
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While it said the majority of price rises are due to global factors, such as Russia’s invasion of Ukraine, there is also evidence to suggest a link with weakening retail competition.
The agency found that at least one supermarket had significantly increased its internal forward-looking margin targets over the period and that other supermarkets may have adjusted their pricing behaviour accordingly.
Although diesel prices have since lowered, the RAC said supermarkets could cut the average prices by a further 6p per litre to 137p and continue to have a profit margin above the long-term average.
Having claimed it will “get to the bottom of what is going on,” the CMA is now due to conduct formal interviews with the senior management teams of the UK’s leading supermarkets and issue its final report by 7 July.
