UK competition watchdog to investigate fuel prices
The UK’s competition watchdog has stepped in after the government called for an ‘urgent’ investigation into petrol station pricing after a week of pain at the pumps.
Business Secretary, Kwasi Kwarteng, urged the move over concerns that petrol and diesel prices are higher than they should be after the 5p fuel duty cut in the Budget.
The CMA says it will undertake a ‘short and focused review’ of fuel prices, as Andrea Coscelli, its chief executive said record pump prices are ‘causing significant concern’ for millions of people.
Meanwhile, both the RAC and AA have called for another fuel duty cut as early as this week.
Over the past week petrol prices have repeatedly hit record highs, with the cost of a litre of unleaded rising from 177.88p to 185.04p.
RAC fuel spokesperson Simon Williams said: “It’s good news that the CMA is to investigate retail fuel pricing as this should help ensure that drivers pay a fairer price at the pumps in the future.
“While this is clearly a positive step, it’s also important to realise that motorists tend to lose out most when there are significant drops in the wholesale price which retailers don’t pass on.
“This was the case in December when there was a big drop in the price of oil which should have translated to lower forecourt prices. Instead retailers stood strong, only lowering their prices by a couple of pence a litre when there should have been a 10p a litre drop in the average price of petrol.
“In a rising market, such as we’re experiencing in now, it’s very different in that retailers are constantly having to put up their prices to reflect the fact their costs are increasing every time they buy new stock.
“Since Russia invaded Ukraine on 24 February the wholesale price of petrol has gone up by 28%. This is why the Government’s 5p March duty cut has had little effect, whether or not it’s been fully passed on by retailers, and why they need to go further now to help drivers.”
The review was requested by Business Secretary Kwasi Kwarteng on Saturday.
The rising oil price and falling pound have more than outweighed the tax cut introduced in March, but petrol station operators have been accused of not fully passing on the fuel duty reduction.
Mr Kwarteng wrote a letter to the Competition and Markets Authority, saying: ‘The British people are rightly frustrated that the £5 billion package does not always appear to have been passed through to forecourt prices’
The CMA move came after a week in which petrol prices have repeatedly hit record highs, with the cost of a litre of unleaded rising from 177.88p to 185.04p.
Over the same period, diesel has climbed from 185.01p to 190.92p on average.