UK Diesel Prices Skyrocket Above EU as Retailers Hold Savings

Southampton (UK): Diesel prices in the UK continue to soar, significantly surpassing those in European counterparts, driven largely by sluggish cost reductions passed on to consumers by retailers. According to the several sources, British drivers are paying approximately 20p more per liter of diesel compared to their EU counterparts. Currently, the average diesel price stands at a high of 152p per liter, marking seven consecutive weeks where the UK holds the top spot for diesel prices in Europe. Notably, drivers in Northern Ireland experience relatively lower prices, around 10p less per liter, despite sourcing from the same suppliers.

The primary reason behind these steep prices appears to be major supermarket chains like Asda, Tesco, Morrisons, and Sainsbury’s, which operate about 20% of UK forecourts and charge higher rates. Conversely, their influence is less pronounced in Northern Ireland, where they manage only 6% of forecourts, offering some relief in pricing.

There has been severe criticism in the UK and several key personalities have criticized retailers for maintaining persistently high profit margins, currently estimated at 16p per liter for diesel and slightly lower for petrol. This contrasts sharply with historical margins, such as the 3p seen pre-pandemic, indicating that retailers are benefiting from price hikes while consumers bear the brunt.

Retailers justify these price increases by citing rising operational costs, including interest rates and wages, which they claim erode profit margins. Gordon Balmer from the Petrol Retailers Association underscores the necessity for higher earnings from fuel sales to sustain business operations and invest in future transitions.

In contrast, Italy faces its own challenges as Prime Minister Giorgia Meloni criticizes the EU’s decision to ban new gas and diesel car sales by 2035. Meloni argues that such measures, aimed at reducing emissions, risk undermining industrial sectors and increasing strategic dependencies on foreign electric vehicle markets.

Looking ahead, the European diesel market is poised for further tightening under new emissions trading systems. Starting in 2027, fuel suppliers across the EU will be required to purchase carbon allowances, potentially adding up to 54 cents per liter to diesel prices by 2031. This move is part of broader efforts to achieve a 55% reduction in greenhouse gas emissions by 2030, posing significant financial implications and regulatory challenges for the transportation sector.

In conclusion, while the UK contends with persistently high diesel prices exacerbated by retailer practices, Italy navigates a future shaped by stringent emission regulations. Both countries face unique economic and regulatory landscapes that will shape the trajectory of diesel pricing and consumer affordability in the years ahead.