I see that Pont Abraham services at the western end of the M4 is in the local REACH press again today:
"When [Wales Online] visited again on Sunday, Pont Abraham was charging 199.9p for diesel and 191.9 for unleaded."
Of course many customers at service stations will actually be businesses with fuel cards rather than individuals, and as such they won't be paying the retail rate anyway.
Surely they're legally restricted on charging duty that isn't due, but could of course just remove the duty and up the price to compensate (thus making even more profit)?
Indeed. As long as they're compliant with competition law they can set the retail price at whatever they like. Their accounts must then organise the payment of the duty rate per litre sold as set by the government and the % rate of VAT based on the value of their sales. The fuel retailers can charge slightly less than the tax due if they want to too, paying some of the taxes themselves. Of course, this is extremely unlikely.
I think that over the next few years people will just need to adjust to the retail prices of motor fuel averaging around £2 / litre. If that means people are more careful with their usage it won't be necccesarily all such a bad thing.