Many drivers yet to feel full benefit of 5p fuel duty cut

• Chancellor cut fuel duty by 5p-per-litre to counter record fuel prices
• Major supermarkets, along with BP-owned and Shell-owned stations, have applied the cut
• Independent fuel stations defend criticism that they have kept prices high 

Motorists are still waiting to feel the full benefit of the Chancellor’s 5p per-litre fuel duty cut at many fuel stations.

The average price of petrol has only fallen by 3.49p (from 167.01p to 163.52p) since the Chancellor Rishi Sunak announced the cut in his Spring Budget on 23 March.

Diesel has seen an even smaller reduction - just 2.43p, with the average price dropping from 179.90p on 23 March to 177.47p on 29 March, according to the latest data from the RAC. 

Its head of policy Nicholas Lyes warned on the day of the Spring Statement that there was  “a very real risk retailers could just absorb some or all of the duty cut themselves by not lowering their prices".

The 3.49p and 2.43p reductions so far reflect the fact that major supermarkets, along with BP-owned and Shell-owned fuel stations have applied the 5p cut (6p including VAT). However, a number of independents have yet to cut pump prices. 

BP owns 300 of its 1,200 branded sites while Shell has around 1,100 sites in its UK network - about half of which are company owned, and there are many more independent garages outside their networks. 

Transport secretary Grant Shapps (pictured below) last week urged drivers to boycott petrol stations which refuse to cut prices.

He said: “Help us with this…shop around so that they learn that if they don’t pass this on, then they are going to lose business.”

Howard Cox, founder of the FairFuelUK Campaign, said that he was “furious” at retailers for not passing on the fuel duty cut to drivers.

“This is sickening exploitation, which this Government could check,” he said, repeating his call for the Government to introduce an independent pump pricing watchdog. 

The Petrol Retailers Association (PRA), which represents independently owned forecourts (around 65 per cent of forecourts), defended the actions of its members. 

In a letter to Shapps the PRA explained that the average dealer forecourt would be unable to pass on the fuel duty cut to consumers immediately, as they first have to deplete their existing stock which was purchased before the cut took effect at 6pm on 23 March.

It said that it wrote to the Chancellor ahead of the Spring Statement communicating this point, and that a 5ppl fuel duty reduction "would not be substantial enough to reduce the price burden on consumers".

The PRA also asked the Chancellor to backdate the cut to 1 March to allow members to sell their existing stock without the added duty.

Gordon Balmer, director of the PRA, said: “The PRA understands why motorists are frustrated with high fuel prices. The Government should have established in their announcement that any cut in fuel duty wouldn’t be immediately reflected in pump prices.

“Over the last few weeks, our members have been pricing fuel competitively despite market volatility. Many members are making negative margins, particularly on diesel.”

"The Government should have established that any cut in fuel duty wouldn’t be immediately reflected in pump prices." Gordon Balmer, PRA

Balmer added: “Smaller, independent forecourts operate as an integral part of local communities, often knowing customers personally. Their smaller volumes mean they are forced to respond to volatile market conditions to continue operations."