Why are motorists in Street and Glastonbury paying more for fuel than those in Somerset's bigger towns?

Fuel prices in the UK reached record highs in 2022, with the average price of petrol hitting 191.53p-per-litre and diesel reaching 199.05p in July.

Although fuel prices in the UK have fallen in recent months, there is now a considerable difference between petrol and diesel prices - currently 24.08p a litre. 

The latest average fuel prices, as of 4 December 2022, are 159.33p for petrol and 183.39p for diesel, according to the RAC.  And the bad news is that diesel prices are likely to go up again following a recent announcement by the oil producer group OPEC+ that it would be cutting oil production by two million barrels a day.

This could lead to diesel prices heading back to 190p, according to RAC fuel spokesperson Simon Williams. 

We've collected the cheapest fuel prices - according to confused.com - across the area for you to compare.

The cheapest price in Somerset at the moment is in Yeovil where motorists filling up at the Asda petrol station on Preston Road pay just 145.7p for a litre of unleaded petrol. Meanwhile, you can expect to spend 160.0p per litre at the petrol station in Morrisons, Glastonbury, and Sainsbury's in Street. In Wells, motorists are paying 169.9p per litre of unleaded petrol.

The cheapest diesel can also be found in Yeovil - 167.7p per litre in Morrisons in Lysander Road, while in Glastonbury the same litre will cost you 186.9p in the Morrison's and Esso garages in Glastonbury, and Sainsbury's in Street. Just a new miles down the road in Wells, motorists are paying 191.9p for the same fuel.

Why do the fuel prices vary so much?

The price of fuel mainly depends on the price of crude oil, however there are other factors that contribute to motorists spending more money filling up their cars.

The main driver of petrol prices is how much competition there is and whether there is any competition from supermarkets.

For example, Taunton has 10 petrol stations in a five-mile radius, including Asda, Morrisons and Sainsbury's, while in Street there is just one petrol station for people to fill up at.

In rural areas petrol stations are also more likely to be run by smaller, independent retailers who have to increase charges to cover their business costs. However, in larger towns and cities the petrol stations are run by big companies like supermarkets that can offer more competitive prices. Supermarket fuel stations are typically 3-4p per litre cheaper than the UK national average fuel price.

Supermarkets are also more likely to lower the rates because they can use motor fuel to promote the rest of their business and attract more shoppers.

There may also be factors that make it more expensive to run a filling station, such as being in a remote area (which makes deliveries marginally more expensive) or a particularly expensive area.

Motorway service stations tend to charge higher prices because motorists have to use them unless they are prepared to leave the motorway.

Is the situation likely to change any time soon?

It..should. But so it isn't, really. The price of oil has recently dipped below $80 for the first time since the start of the year. The RAC is claiming that motorists across the UK should see a drop in prices by at least 10p per litre. 

RAC fuel spokesman Simon Williams said: "There is yet more pressure on the biggest fuel retailers today to pass on savings to drivers as the price of oil has dipped below $80 for the first time since the start of the year causing the wholesale cost of petrol to tumble to 105p a litre and diesel to 119p.

"If a cut of at least 10p a litre doesn't come soon it will be yet more evidence of 'rocket and feather' pricing for the Competition and Markets Authority to take note of. The disparity between average pump prices at 158p for petrol and 182p for diesel and their wholesale equivalents is truly shocking.

"Even taking account of major retailers' buying cycles, we can see no justification for them not cutting their prices significantly."

Mr Williams added: "This failure to reflect falling wholesale costs over multiple weeks at the pumps is totally unreasonable.

"Whenever you have smaller, independent forecourts charging far less than the big four supermarkets, which buy far larger quantities of fuel on a far more frequent basis, it has to be a cause for major concern.

"Something badly needs to change to give drivers a fairer deal at the pumps and everyone will be looking to the CMA to instigate this.

"While our data shows there were clearly issues with 'rocket and feather' pricing before the pandemic, the situation is 10 times worse today.

"What's more, it really isn't the case that volatility brought about by the war in Ukraine is to blame for what's happening now as wholesale prices are now so much lower than they were nine weeks ago."

On top of that, despite the average price of petrol and diesel falling by 6p a litre in November, data from RAC Fuel Watch shows that the reductions on the country's forecourts should have been at least twice that.

According to the RAC, unleaded came down from 165.96p to 159.88p while diesel dropped from 190.31p to 183.87p, saving motorists more than £3 a tank. It now costs £91.28 to fill up 55-litre family-sized petrol car and £101.13 for a similar diesel vehicle.

The reason the RAC believes drivers have lost out is due to the wholesale price of petrol plummeting by 11p in November from 122.63p to 111.53p on top of significant reductions in late October.

Diesel decreased by even more last month, coming down 15p from 143p to 128p.

Taking an average of wholesale prices for the last week of November (21-25), the RAC believes petrol should really be at an average of 146p and diesel to 169p – 14p and 15p lower than the current averages.

Consequently, the RAC believes retailers are now collectively enjoying margins of more than 20p a litre.

Some good news please?

Last month, fuel prices started to drop, but drivers were denied bigger reductions as supermarkets were clinging on to their margins.

Asda has now decreased the cost of petrol across its 320 UK filling stations by an average of 4.5p per litre, and an average of 5.5p per litre has also cut diesel prices across all Asda stores.

Mr Williams said: "While we're pleased one major supermarket retailer has finally started heeding our calls to pass on the enormous drop in the wholesale prices of both fuels, the fact these price cuts have been made so quietly is surely admission that they should have come much sooner. 

"Asda is now charging an average of 153.5p for petrol and 176.7p for diesel which is around 2p less than its rivals. We urge the other three supermarkets to catch up quickly – or go even further – and give drivers some much-needed relief from high prices next time they fill up.

"If they do, this will bring the UK average petrol price down from its current 157.8p which benefit drivers everywhere."

How to save on fuel all year round

Fill up at busy petrol stations - These stations buy more fuel and can take advantage of falling prices.

Choose a big station - Stations buy their fuel on the wholesale market. Just as in any other negotiation, the big buyers are better able to strike a deal.

Look for a cluster of stations - When several stations are close together, they are more likely to cut prices to tempt drivers in.

Do your research - The website PetrolPrices.com allows you to compare prices in your area. It also lists the latest average prices and is regularly updated.

Play the supermarket game - Supermarkets are competing on fuel prices along with everything else. When you're shopping, keep an eye out for vouchers offering petrol discounts.

Stop by provincial towns - Airports, motorways, expensive cities and rural areas have the highest charges, according to PetrolPrices.com analysis.