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Fuel prices fall for fourth month in a row but diesel still 'seriously overpriced'

Fuel prices Shell logos are seen on fuel pumps at a petrol station in west London, January 29, 2015. Royal Dutch Shell blamed writedowns and forex losses for making almost no money in oil production, its most powerful division, in the last quarter of 2014, causing the company to miss profit forecasts by more than 20 percent. Shell, the largest of the European energy majors, also announced a relatively modest three-year, $15 billion cut in spending to help it weather the plunge in oil prices. REUTERS/Toby Melville (BRITAIN - Tags: BUSINESS ENERGY)
Fuel prices fall for fourth month in a row but dark clouds loom, RAC warned. Photo: Toby Melville/Reuters (Toby Melville / reuters)

The cost of both petrol and diesel fell for the fourth consecutive month in February but owners of diesel vehicles remain to be “seriously over-priced” at forecourts.

February saw the average price of a litre of unleaded come down another penny (1.26p) to 147.72p, while diesel dropped 3.19p to 167.19p, according to figures from RAC.

The falls make the cost of filling a 55-litre family petrol car £81.25, down £0.69 from £81.94 a month earlier, and the diesel equivalent £91.95.

“While the reduction in diesel prices is good news, wholesale price data analysed by the RAC shows drivers of the UK’s 12m diesel cars continue to pay a needlessly high price every time they fill up.

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“Despite there being just a 6p difference between the wholesale prices of both diesel and petrol throughout all of February, diesel pump prices are currently a colossal 20p more than petrol. This means anyone filling a diesel car is, the RAC calculates, paying around £7 more per tank than they should be if diesel was being sold at a fairer price of around 155p a litre,” RAC said.

However, all drivers are set to pay more at the forecourts if in two weeks time unless he chancellor Jeremy Hunt decides to keep the 5p duty cut put in place a year ago, and cancel the annual planned hike at the Spring Budget on 15 March.

If the duty cut was to be removed as originally planned, the RAC estimates current petrol prices would rise to 153.72p and diesel to 173.19p when factoring in VAT.

RAC fuel spokesman Simon Williams said: “RAC fuel spokesman Simon Williams said: “A reduction in pump prices would normally be extremely welcome news for drivers, not least in a cost-of-living crisis that is making the price of so many everyday items and services much more expensive than normal. But while our analysis shows drivers of petrol cars are paying a fair price at the pumps, the same sadly can’t be said for anyone whose vehicle runs on diesel.

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“Retailers really ought to demonstrate they’re on the side of drivers by cutting their diesel prices now – not least as the wholesale price is on a par with where it was 12 months ago, yet the price they’re charging drivers at the pumps remains needlessly high.

“All eyes are now on what the chancellor decides to do with fuel duty at the Budget in just two weeks’ time. While we accept the 5p cut introduced last year can’t last forever, with household finances under even more pressure this Spring than they were a year ago, we don’t think now is the time to be removing it."

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