Business Secretary Kwasi Kwarteng has urged the UK's competition watchdog to conduct an urgent review into whether a 5p fuel duty cut is being passed on quickly enough to drivers. He has reportedly asked the Competition and Markets Authority (CMA) to examine the fuel market and whether there are local variations in petrol and diesel prices.
This comes as the cost of filling an average family car has now hit a record £100. The CBI has warned households will go into recession later this year reports the BBC. The Petrol Retailers Association, which represents independent fuel retailers, said it "welcomed transparency regarding fuel pricing".
Fears over oil supply due to Russia's invasion of Ukraine have seen pump prices rise steadily since February. The average price of a litre of petrol at UK forecourts reached a new record of 183.2p on Thursday, according to data firm Experian.
That was a rise of 0.9p compared with Wednesday. The average cost of filling a typical 55-litre family car exceeded £100 for the first time on Wednesday.
The average price of a litre of diesel on Thursday was also a record, at 188.8p. Analysis by the AA indicated that high streets are losing £23 million a day in potential consumer spending due to the rising amount of money private motorists are spending on fuel.
In a letter to the CMA, Mr Kwarteng said that despite introducing a fuel duty cut "there remains widespread concern about the pace of the increase in prices at the forecourt and, that prices may not fall as much or as fast as they rise". As well as looking at whether the duty cut is being passed on to consumers, Mr Kwarteng has also asked the CMA to examine "whether the retail fuel market has adversely affected consumer interests".
This will include investigating whether there are price variations for petrol and diesel at local forecourts. "Drivers should be getting a fair deal for fuel across the UK," said Mr Kwarteng. "Healthy competition between forecourts is key to achieving this, with competition working to keep pressure on prices." He has asked for the CMA to report back to him by July 7.
The Petrol Retailers Association says its members passed on the 5p fuel duty cut after it was announced in March. However, wholesale fuel prices have continued to rise since then.
That and other pressures have left retailers "operating on extremely tight margins", it says. Boss Gordon Balmer said the association had requested several meetings with Mr Kwarteng "to explain how the fuel market works" but had not heard back.
"Our members have had to endure several [unfair] headlines in the press," he added. "Therefore, the news that the minister has contacted the CMA to conduct an urgent review of the fuel market is timely."
