The UK’s competition watchdog has confirmed it is looking into rising petrol and diesel prices amid concerns that retailers are charging more than necessary in response to the ongoing conflict in the Middle East.
Firms responsible for fuel stations across the country have been told that they must soon supply revenue, costs and sales data, the Competition and Markets Authority (CMA) has confirmed.
This accelerates the watchdog’s review of fuel margins – the difference between what a retailer pays for fuel, and what it sells it at – the CMA confirmed in an update on Thursday.
Juliette Enser, executive director for markets, said: “Whilst price increases might be inevitable because of rising wholesale costs, it is important that those increases reflect genuine cost pressures.
“We will be closely scrutinising and reporting on what’s happening with fuel prices and call out any concerning behaviour.”
The CMA adds that it will look into “how quickly” fuel prices change, with wholesale costs, when the data is available, and whether there is evidence of “rocket and feather pricing”. This describes when prices rise very quickly in response to pressures, but decline slower than necessary as retailers look to make a profit.
Some critics have accused fuel retailers of cashing-in on the Middle East conflict, with prices at some filling stations surging in the two weeks since the US and Israel launched strikes on Iran.
Speaking on Tuesday, chancellor Rachel Reeves accused petrol retailers of “price gouging” and insisted the government’s priority was to stop companies from using the conflict in the Middle East to “rip off their customers”.
“Yesterday some petrol retailers were charging almost 180p a litre while others charged less than 130p a litre,” she said, vowing to meet companies this month “to get prices down at the pumps”.
Commenting on the rises last week, MP Daisy Cooper, said: “People have already been paying through the nose to fill up their car, as forecourts have jacked up their profit margins over a period of months.
“Last time oil prices went up, petrol stations raised their profits even more, so people are now worried that this could happen yet again, at an even greater scale. “
“Fuel giants should not be allowed to treat families already struggling with the cost of living like cash cows,” the Liberal Democrat Treasury spokesperson added.
In December, the CMA warned that fuel margins remain persistently high compared to historic levels, adding that this could not be explained by retailers’ operating costs.
Prices at the pump increased rapidly following Russia’s invasion of Ukraine in 2022, figures from the RAC show, and have remained above pre-2022 levels in the years since.
The latest rise is now the steepest since then, and shows little sign of abating.
Petrol and diesel prices hit their highest in more than 20 months this week, latest data shows, increasing by between 6.12p and 12.74p per litre since 28 February, when the latest Middle East conflict began.
On average, drivers can now expect to pay 138.96p per litre of unleaded petrol and 155.12p per litre of diesel at the pump, according to data from the RAC.
This means the cost of filling up a 55-litre family diesel car has increased by as much as £6.67 in just over a week, with further price rises expected.
This has been fuelled by a spike in oil prices, which have a significant effect on the cost of wholesale fuel. Brent crude, the global benchmark for oil prices, jumped to more than $100 (£74) a barrel on Monday for the first time since 2022.
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