Drivers are being overcharged for petrol by £5 at the pump as retailers refuse to pass on savings from falling wholesale prices

Fuel retailers have been slammed for not passing on a 5p fuel duty cut to customers which means customers are being overcharged £5 for a fill of petrol, the RAC has said.

Despite the average price of petrol falling by 7.5p per litre in November to 146.95, data from RAC Fuel Watch shows that drivers are still paying 10p more than they should be.

The price of diesel came down by almost 7p to 154.40p but this still means punters are being overcharged by 5p a litre due to savings from lower wholesale costs not being passed on by retailers to drivers at the pumps.

The RAC said drivers are 'far from getting a fair price on the forecourt' and estimate they are losing out on £184 million per month due to retailers refusing to pass on the cut.

The news will come as a bitter shock to families struggling amid the cost-of-living crisis.  

The RAC believes petrol should be sold for an average of 137p and diesel for 150p, based on retailers taking a fairer margin. 

This means drivers are currently paying around £5 more than they should be to fill up an average 55-litre family car (£80.62 v £75.35). For diesel, the figure is around £2.50 (£84.92 v £82.50).

In stark contrast, membership-only retailer Costco is currently selling unleaded for an average of 133.7p and diesel for 144p - 14p and 11p less than the UK average respectively. 

In Northern Ireland unleaded is being sold for an average of 141.4p and diesel for 149.5p - 5.5p and 5p less than the UK average.

Energy Secretary Claire Coutinho wrote to fuel providers in October and urged them to lower their fuel prices in line with the fuel duty cuts. 

While this action may have started major providers cutting their prices, RAC fuel spokesman Simon Williams said it was 'extremely worrying' that 'prices aren't falling fast enough'.

He said: 'While the price of fuel fell in November, the truth is there is no reason whatsoever for drivers to be jubilant as the data clearly shows they are continuing to get a rough deal at the pumps, unless they live in Northern Ireland. 

'Wholesale fuel costs have been falling for months, so they should be paying around 137p for petrol, instead of a whopping 147p. Diesel is also overpriced at 154.40p when it should be on sale for under 150p.

'This is extremely worrying as the biggest retailers don't seem to have heeded the warnings levelled at them by Energy Secretary Claire Coutinho at the end of October saying she wouldn't hesitate to call out those that rip off the public.

'While the Energy Secretary's action may have encouraged retailers to begin reducing their prices, it's undoubtedly a case of far too little, far too late. 

Mr Williams added that, if a price monitoring body' had been set up before now, then customers 'might finally be getting a fairer deal at the pumps'.

He said: 'The wholesale market data the RAC analyses shows the true picture and unfortunately, for the Government and drivers, it shows the 5p-a-litre duty cut is not getting to drivers at all, and prices aren't falling nearly fast enough yet again.

'We've contacted her department to explain what's really going on with a view to prompting greater and more effective intervention. 

'If a price monitoring body had already been set up by now - as recommended by the Competition and Markets Authority (CMA) and accepted by the Government - then this might have been prevented and people might finally be getting a fairer deal at the pumps.

'We reiterate our call to the biggest retailers to significantly cut their prices to mirror what's happening with greatly reduced wholesale costs.'