THE competition and consumer rights watchdog has issued a statement in response to the SNP calling for an investigation into fuel "price gouging".
On Monday, Alyn Smith, SNP MSP for Stirling, wrote to the Competition and Markets Authority (CMA) requesting the watchdog looks into whether or not energy and oil firms are overcharging Scots.
Smith wrote: "As the MSP of a Scottish rural constituency, households in my area and others across Scotland are far more likely to rely on domestic fuel oil for which I note there is no price cap. I would be grateful if the CMA could investigate whether there is a significant risk of price gouging going on in this area, particularly in relation to heating oil and rural areas?"
In his letter Smith added: "Fuel prices have increased substantially following the outbreak of the Iran War. Your department has helpfully been investigating the risk of price gouging since March and I note with concern that whilst there is no widespread evidence of price gouging, there are some instances of individual retailers undertaking this.
"Equally, as the interim report published by the CMA on 1st May notes, “Fuel margins remain at historically high levels reflecting ongoing concern about a lack of competitive pressure in the fuel retail market.”
The war in Iran has impacted the global price of energy as the closure of the Strait of Hormuz, a key shipping lane, has disrupted the transport of around 20%-30% of the world's oil supply.
This has driven costs up, however, concerns have been raised in the UK that the profit margins being seen from some firms suggests prices have risen higher than what would be required to offset costs.
When asked for its response to the letter, the CMA issued a statement to The National, saying an investigation is underway.
A spokesperson said: "Given the ongoing situation in the Middle East and the impact that is having on prices for key commodities, it is more important than ever that effective competition helps minimise price increases and that consumer rights are protected.
“We launched a review of the heating oil market in March to get a clear picture of how it can work better for consumers across the UK, including in Scotland where it is the primary source of fuel for heating homes in many rural communities.
“This will help ensure people are treated fairly and any price increases reflect genuine cost pressures.”
The authority will publish the findings of its report later in June. It will include financial information from businesses, which the CMA is able to obtain through its statutory powers, as well as the outcomes of discussions held with consumer rights groups, Westminster, and the governments of Scotland, Wales and Northern Ireland.
The study is focussed on how effective competition is in the market for oil and energy, including how many businesses operate in the sector and the degree of choice available to consumers, as well as an investigation into if the increase in prices correlates to genuine cost pressures.
