British motorists 'overcharged by £1' every time they fill their tank

Filling up a tank is costing £1 more than it should because oil companies are refusing to cut prices.

Average petrol prices in the UK have fallen 6.5p in a month according to the latest AA report, but motorists are still having to pay over the odds.

The AA claims the drop in price does not reflect the full 18 per cent plunge in wholesale petrol prices since their peak on July 11.

While prices have dropped 8.5p per litre - to stand at 111.2p per litre, from an all-time high of 119.7p on July 17 - the AA survey reveals drivers are still being charged around 113.15p.

This means they are being  short- changed by £1 every time they fill their tank.

Shell, which this month announced bumper profits, sells the most expensive petrol at 115.23p a litre - compared to the cheapest at the Asda supermarket chain at 109.66p.

It also had the second-lowest price drop in the last month - just 5.26p a litre compared to 8p by Morrisons.

The AA said the full price fall would slash £13.63 off the typical two-car family's monthly spend on petrol.

Paul Watters, head of public affairs at the AA, said: 'Local price-matching by supermarkets often creates a 2p price difference between neighbouring towns.

'In Reading, with an Asda, supermarkets in the area yesterday charged 109.9 pence per litre.

'In Windsor, Wokingham, Maidenhead, Bracknell, Basingstoke, Newbury and Andover, cheapest prices were at least 111.9 pence per litre,' said Mr Watters.

But he added: 'Whichever way you look at it, many drivers are being short-changed by around £1 a tank when they fill up with petrol in the UK.

'As well as undermining family budgets, selfishly holding back 2p a litre in wholesale price reductions is denying potential consumer spending at other local businesses suffering from falling sales.'