Skip advert
Advertisement

Watchdog to bite back at UK’s rip-off fuel prices

Competitions and Markets Authority gets powers to shine the spotlight on profiteering fuel station operators

The UK’s consumer watchdog will get new powers to demand price and profit information from road fuel retailers, that will put the spotlight on future attempts to hike fuel prices unfairly.

The powers have been granted to the Competitions and Markets Authority (CMA) by the government’s Department for Energy Security and Net Zero, and should become law later next year. Amendments were tabled to the Digital Markets, Competition and Consumers Bill in parliament on 15 November 2023, that will force petrol and diesel retailers, including supermarkets, to share information with the CMA on how much they are charging customers for fuel, versus their profit.

Advertisement - Article continues below

The change to the law is designed to help improve competition in the market and “will shine a light on any attempt from retailers to unfairly hike up fuel prices”, the government says.

Under the new amendment, the CMA will become the body responsible for monitoring petrol and diesel prices, and reporting any sign of malpractice. The appointment of a fuel price monitor was one of the recommendations the CMA itself made following its high-profile year-long investigation into filling station prices that ended in the summer, and it volunteered itself for the role.

According to a government statement, any fuel retailer that refuses to come clean on their fuel prices and margins once the amendments become law, could face a fixed fine of up one per cent of global turnover, or an ongoing fine of up to five per cent of daily turnover. 

Skip advert
Advertisement
Skip advert
Advertisement - Article continues below

The CMA has already begun working on its new remit, and last week published its first road fuel report as ‘unofficial’ monitor, when it raised new concerns that the UK fuel market is not working as it should.

Looking at the period from the end of May 2023 to October 2023, this first CMA monitoring report shows that prices rose during June, July and August, driven by an increase in global oil prices. However, “wholesale prices then reduced in September and October while retail prices did not,” the CMA said. “While it is too early to draw definitive conclusions, this could indicate a lack of competitive response from fuel retailers if this trend continues.”

petrol prices

On retailer margins, the CMA says on average they fell around 4.5 pence per litre from an average of 11.9ppl to 7.3ppl between the start of the year to August 2023. “Nonetheless, August margins remain higher than those for any year prior to 2021,” it said.

Advertisement - Article continues below

Sarah Cardell is chief executive of the CMA, and she reckons the latest data paints a mixed picture for motorists.

“Drivers are feeling the pain again as petrol prices at the pump have been on the rise since June,” she says. “Over the summer we saw rising wholesale costs, but more recent trends give cause for concern that competition is still not working well in this market to hold down pump prices.”

Skip advert
Advertisement
Skip advert
Advertisement - Article continues below

Cardell describes this first report from the CMA as an important step, but said that while many filling station operators had provided information voluntarily pending a change in the law, major retailers Shell and Moto-Way had declined to respond to its request for data. “That’s why it is so important that a permanent fuel monitor – with powers to demand information from all retailers – is put in place to give a fuller picture of how the market is working,” she said.

RAC fuel spokesman Simon Williams said: “We welcome the CMA being given new powers to take action against retailers that don’t pass on the savings they benefit from when wholesale fuel costs fall significantly. Due to our long-term monitoring of retail and wholesale prices, we have been calling for fairer, more transparent pricing for years.

“While the CMA’s report concluded the supermarkets had overcharged to the tune of £900m last year, our data shows this behaviour is continuing to this day with supermarket fuel margins more than double what they were before the pandemic. 

“These new powers can’t come soon enough because, as it stands, the Treasury’s 5p-a-litre fuel duty discount is not making it to drivers at the pumps.”

How expensive is fuel in your area? Tell us in the comments section below...

Skip advert
Advertisement
Current affairs and features editor

Chris covers all aspects of motoring life for Auto Express. Over a long career he has contributed news and car reviews to brands such as Autocar, WhatCar?, PistonHeads, Goodwood and The Motor Trader.

Skip advert
Advertisement

Recommended

Vauxhall could stop UK EV production due to ZEV mandate
Vauxhall Ellesmere Port
News

Vauxhall could stop UK EV production due to ZEV mandate

Vauxhall’s parent company warns of “consequences” due to the UK’s tough ZEV mandate quotas, while the SMMT boss says car makers “have the stick, we ju…
25 Jun 2024
Driving test wait times up another 20% as DVSA plan is failing
Learner
News

Driving test wait times up another 20% as DVSA plan is failing

The promise that DVSA is ‘taking all measures it can to reduce waiting times’ rings hollow as waits increase by 20 per cent
17 Jun 2024
Labour to restore 2030 ICE ban, but fuel duty hike on the cards
Labour party logo
News

Labour to restore 2030 ICE ban, but fuel duty hike on the cards

The Labour Party’s manifesto promises support for the EV manufacturing industry and used electric car buyers, as well as an investigation into high in…
13 Jun 2024
EU threatens Chinese electric car tariffs of almost 50 per cent
XPeng G6 - front cornering
News

EU threatens Chinese electric car tariffs of almost 50 per cent

New tariffs would be imposed on top of pre-existing duties in an aim to override “unfair” subsidies by the Chinese government
12 Jun 2024

Most Popular

Dacia, Kia and MG have gone from no-hopers to celebrated winners
Opinion - Dacia Duster
Opinion

Dacia, Kia and MG have gone from no-hopers to celebrated winners

Mike Rutherford thinks Dacia, Kia and MG were once considered underdogs, but the 2024 Driver Power results show just how far all three manufacturers h…
23 Jun 2024
New MG Cyberster 2024 review: electric GT is a world away from the MGB
MG Cyberster 2024 UK - front
Road tests

New MG Cyberster 2024 review: electric GT is a world away from the MGB

The two-seat MG Cyberster electric roadster fits the open-topped grand tourer brief
24 Jun 2024
New Cupra Leon 2024 facelift review: fun hatch gets sharper looks
New 2024 Cupra Leon - front tracking
Road tests

New Cupra Leon 2024 facelift review: fun hatch gets sharper looks

Cupra tidies up its Leon range with a facelift, but it’s the plug-in hybrid hatch which gains the greatest upgrades
21 Jun 2024