The competition regulator has announced it will carry out a “short and focused review” of fuel prices. Andrea Coscelli, chief executive of the Competition and Markets Authority (CMA), said record pump prices are “causing significant concern” for millions of people.
The review was requested by Business Secretary Kwasi Kwarteng on Saturday. He expressed concern that the 5p per litre cut in fuel duty implemented in March has not stopped prices from soaring.
“The British people are rightly frustrated that the £5 billion package does not always appear to have been passed through to forecourt prices,” he wrote. Figures from data firm Experian show the average price of a litre of petrol at UK forecourts climbed to a record 185.0p on Sunday.
That was an increase of 7.1p in just a week. The average price of diesel was 190.9p per litre on Sunday.
Mr Coscelli’s response to Mr Kwarteng said: “High road fuel prices are causing significant concern for the millions of consumers and businesses who rely on being able to afford to fill up their vehicles. As you note, global factors, including the war in Ukraine, have been the principal driver of recent trends.
“But if competition is not working well in the retail fuel market, pump prices will be even higher than they need to be. With that in mind, the CMA will, as you request, carry out a short and focused review of the market, and provide advice to Government on steps that might be taken to improve outcomes for consumers across the UK.”
He added that the CMA will consider “what further work may be necessary” once the review is completed.
RAC fuel spokesman Simon Williams described the “speed and scale” of the rise in fuel prices as “staggering”. He said: “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.”
AA fuel price spokesman Luke Bosdet said the rise in petrol prices “should be grinding to a halt” by the end of the week due to wholesale prices falling since the start of the month. He went on: “If they continue to go up substantially afterwards, we will be intrigued to hear what excuses the fuel trade has this time.”
Mr Bosdet added that the “relentless surge” in wholesale and retail costs for diesel is “a nightmare” which will have a knock-on effect on delivery prices for goods and services.
