Kwasi Kwarteng orders inquiry into cost of fuelling up
The business secretary, Kwasi Kwarteng, has asked the UK’s competition watchdog to urgently review petrol station operators, amid concerns that retailers have not passed on the recent cut to fuel duty.
However the RAC says the Government is now collecting £46 from every full tank of fuel and called for further cuts in duty.
In a letter to the Competition and Markets Authority (CMA), Kwarteng wrote that people were “rightly frustrated” that the 5p-a-litre reduction had not stopped prices from soaring to record levels at forecourts.
Kwarteng asked the CMA to conduct an urgent review of the fuel market, and a longer-term study that would examine the health of competition in the market, to examine whether it has hurt consumer interests amid rising prices.
He noted regional disparities in petrol prices, and asked for an initial report of recommendations to “strengthen competition” in the petrol market by 7 July.
“Drivers should be getting a fair deal for fuel across the UK,” Kwarteng wrote.
“I am writing to you to ask that the CMA conduct an urgent review of the fuel market … to explore whether the retail fuel market has adversely affected consumer interests.”
The competition watchdog had previously made Asda and Morrisons sell a number of forecourts during private equity acquisitions.
The average price of a litre of petrol at UK forecourts rose by 7p last week, according to data firm Experian Catalist, hitting a new record of 183.2p on Thursday. That pushed the cost of filling a typical car over the £100 mark.
Today the RAC said average fuel prices have shot up to new records yet again with petrol hitting 185.04p and diesel 190.92p, an increase of 2p a litre on both since Thursday.
This takes the cost of filling a 55-litre family car with petrol to £101.77 and has led to the first ever £105 fill-up for diesel,” RAC fule spokesperson SImon Williams said.
“Incredibly, the Government is now raking around £46 in tax from every full tank,” he said.
“The speed and scale of the increase is staggering with unleaded going up 7p in a week and diesel by nearly 6p. This must surely put more pressure on the Government to take action to ensure drivers don’t endure a summer of discontent at the pumps.
“We hope the Government’s persistent talk about the importance of retailers passing on March’s 5p duty cut fully is a precursor to an announcement of a deeper cut this week. If that’s the case, it’s very welcome, albeit overdue as the 5p cut has been well and truly overtaken by events on the wholesale market since then.”
Petrol retailers have blamed surging wholesale prices, saying oil refineries had not passed on a fall in the price of crude oil since the highs during the early days of the war in Ukraine.
Jack Cousens, the AA’s head of roads policy, welcomed Kwarteng’s move but called for “more urgent action”.
“To relieve pressure at the pumps we need an immediate 10p cut to fuel duty,” he argued.
“Longer term, the CMA should consider extending the pump price transparency available in Northern Ireland to the rest of the UK. The Consumer Council’s fuel price checker stimulates competition and has led to drivers there enjoying the lowest fuel prices in the UK,” Cousens said.
Trade unions and drivers have warned that the record increase in fuel prices could force staff who rely on their vehicles for work to quit, including essential workers.