Petrol and diesel prices have risen by 10p since the start of the year, adding £5.50 to the cost of filling up the average family car.
The RAC said a typical price for a litre of petrol increased by 3p to 150p in April alone.
Drivers are being “seriously overcharged for diesel”, with average prices rising by 2p per litre to 157.8p in April, it said.
In April, before the most recent increases, the average cost of filling a family car was £82.50 according to figures from the AA.
Fuel prices have risen as a result of Iranian-backed missile attacks on shipping in the Red Sea, forcing oil tankers to take a longer and more costly route to Europe.
RAC spokesman Simon Williams said: “Drivers are once again having to dig deep just to go about their daily lives.
“Our data shows petrol and diesel have now gone up 10p a litre so far this year on the back of further increases in April of 3p and 2p respectively.
Vital artery for global trade
“Some of this is down to the oil price and the pound-to-dollar exchange rate making wholesale petrol more expensive for retailers to buy.”
Wholesale oil prices rose after Iran-backed Houthi rebels in Yemen began attacking merchant shipping passing through the Red Sea in March.
The strait is a vital artery for global trade, including oil tankers from the Middle East that pass through the Suez Canal, at the northern end of the Red Sea, en route to Europe.
Ship owners diverted their tankers around Africa as a result of the attacks, adding weeks to their voyages and increasing the price of crude oil.
Crude oil is refined into petrol, diesel and other useful oil-based products.
The RAC is, however, calling on the Competition and Markets Authority (CMA), a Government watchdog, to address “glaring issues” with fuel retailing.
The motoring organisation claims retailers are overcharging motorists by making too much profit on the price of a litre.
Mr Williams said: “Worryingly, the CMA’s warning shot about higher retailer margins at the end of March appears to have fallen on deaf ears, meaning drivers are once again being seriously overcharged for diesel.”
Rocket and feather pricing
The CMA is monitoring fuel prices closely after investigating the market last year and finding evidence of profiteering.
It said in March that petrol retailers’ margins remained too high.
RAC analysis shows that fuel duty and VAT make up 52 per cent of the price of petrol.
At current petrol prices of 150p per litre, retailers are making about 11.6p, with the taxman pocketing nearly 78p for each litre sold.
The RAC said if the biggest fuel retailers charged “fairer margins” it would stop so-called rocket and feather pricing, where pump prices surge when wholesale costs rise but fall slowly when those costs decline.
Forecourt operators have hit back, however, claiming that their businesses are facing rising costs – such as increases in the minimum wage – and are struggling to remain viable.
Gordon Balmer, executive director of the Petrol Retailers’ Association, said in April that its members were “doing all they can to keep prices as low as possible for their customers”.
He claimed: “If petrol stations started going out of business, the country’s energy security would be compromised, motorists would have to drive further to fill up on fuel and a substantial number of jobs would be lost.”
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
