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Some fuel retailers are “losing money” on diesel sales following the spike in wholesale prices witnessed since the start of the Middle East conflict, according to the industry.
The Petrol Retailers’ Association (PRA), which represents the bulk of the sector, told Sky News the nature of some operators’ buying contracts – some of which involve days-long lags on market costs – meant they were unable to keep up with dramatic increases seen last week as global oil prices soared.
Iran latest: Cargo ships hit in Strait of Hormuz
Gordon Balmer, the body’s executive director, also criticised a warning by the chancellor on Tuesday that the fuel sector would not get away with “price gouging”.
News of a looming meeting, announced by Rachel Reeves, involving herself, retailers and the Competition and Markets Authority (CMA), was news to Mr Balmer.
He has consistently denied the UK fuel market is beset with profiteering.
The CMA has consistently accused the industry of giving motorists a poor deal at the pumps since 2021.
The immediate impact of the war on filling up raised alarm bells amid claims retailers were passing on higher prices before they had even taken fresh deliveries that reflected elevated wholesale costs.
The industry is understood to look to balance its margins over the course of a week.
UK diesel is particularly exposed to international market shifts because, unlike petrol, the vast majority of supply is imported.
“The wholesale price rose by (up to) 25p per litre at one stage last week,” said Mr Balmer, while explaining that 20% of Europe’s diesel now comes through the Strait of Hormuz shipping lane which is currently closed to most tanker…
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