"Rocket and feather" strategy for motor fuel pricing

What is the ‘rocket and feather’ effect, and is it true?

This term describes what is frequently seen with motor fuel prices on UK forecourts. They appear to rise faster than they ever come down - they go up like a rocket but fall like a feather. The RAC believes motor fuel retailers "have a reasonable record of passing on reductions in the wholesale price of fuel to motorists at the pump, but there are occasions where we think this could be carried out more quickly.
Of course, the longer they hold off cutting pump prices when crude oil prices are falling, the better it is for their margins, and the reverse is also true".

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Avoid motorway services for fuel stops
Typically you pay 10p a litre and more - for a typical 60 litre tank that's £6! See our article with an example on the M6. More

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Posted: 190314

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Will we see forecourt prices rising?
Since November 2018 the average price of unleaded petrol went down by 10.5 p/litre, falling from 130.1 p to 119.6 p by the end of January 2019. The cost of diesel also dropped, by 7.3p per litre to 128.9 p. Crude oil production cuts made by OPEC (Organisation of the Petroleum Exporting Countries) in partnership with Russia have driven up the price of crude oil by 5%. This added US$3 to the barrel price during February 2019 moving the price to US$65.13 by the end of the month. At one point, the price of a barrel reached US$67- the highest it’s been since November 2018.

But prices are turning. After over six weeks of keeping its forecourt prices the same, Asda was the first supermarket of "the big four" in the UK to pass the rise in wholesale prices on to its customers with a slight increase in the price of its unleaded petrol. An average 60 litre family car now costs just over £70 to fill up with petrol.

"Rocket and feather" feature of the motor fuel market
RAC Media Relations Manager and fuel spokesman, Simon Williams, said the price rise would disappoint drivers but “what they probably aren’t aware of is that retailers, who held off cuts for weeks when they were warranted, instantly raised their prices when they saw the wholesale price go up very slightly”. He added that this was “clear proof of the infamous ‘rocket and feather’ pricing strategy where prices go up like a rocket and fall like a feather.”

The forecourt industry denies making good profits from petrol sales and it’s true that most retailers make only a little on a litre of fuel; often just one or two pence profit per litre. “That is hardly sustainable,” said Brian Madderson, Chairman of the Petrol Retailers Association (PRA), in the past when defending earlier prices rises. He explained the only way most petrol stations survive is by having other facilities attached to them, such as shops, car washes and cash machines. Mr Madderson added: “If they were making substantial margins, we would see more investment coming into the business, rather than going out of it.”

Saving you money
Even though a driver can’t control the price of petrol and diesel, it’s possible to reduce how much you use. Figures by the Department for Transport show we use up to 9% more fuel driving at 70mph than at 60mph and up to 25% more fuel travelling at 80mph instead of 70mph. The faster you drive, the greater your fuel consumption.
The most energy-efficient way of driving is a smooth use of the throttle. Focus on what’s ahead so you can make adjustments early to prevent a disruption to your flow. Another economy factor is weight - on average, every extra 50kg of weight in the car increases fuel consumption by 2%, so don’t keep unnecessary items in your boot and only fill up the fuel tank halfway if you’re an urban driver. Don’t leave your roof racks on as they cause ‘drag’. Even empty roof racks increase fuel consumption by around 10%.