An "urgent" review into the rising cost of petrol has been launched by the competition watchdog after prices hit a record high, prompting concerns that the fuel duty cut implemented to lower costs has not been passed on to customers.
Andrea Coscelli, chief executive of the Competition and Markets Authority (CMA) confirmed on Monday, June 13, that the organisation would be reviewing prices after business and energy secretary Kwasi Kwarteng wrote to the CMA over the weekend calling for an urgent review. In his letter from June 11, Mr Kwarteng raised concerns that the 5p per litre cut in fuel duty brought into effect in March had not stopped prices from soaring, with some customers seeing higher prices in some towns compared to petrol costs in similar neighbouring towns.
He wrote: "The British people are rightly frustrated that the £5 billion package does not always appear to have been passed through to forecourt prices. 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. Drivers should be getting a fair deal for fuel across the UK."
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Mr Kwarteng also wrote to fuel retailers last month, on May 17, calling for them to do everything possible to ensure drivers were getting a fair deal, after the Russian invasion of Ukraine and the post-covid economy changes pushed prices up to "unprecedented levels".
At that time, average fuel costs were sitting at around 165.1p a litre for petrol and 179.7p for diesel. Since then, prices have soared even higher, hitting an all-time record of 185.0p for a litre of petrol on Sunday, June 12 - up 7.1p in just one week according to data firm Experian.
One petrol station in London was recently blasted for charging 238.9p a litre, with figures from price comparison website PetrolPrices show filling stations at motorway service areas are charging up to 202.9p per litre for petrol.
Dr Coscelli said record pump prices are “causing significant concern” for millions of people, and launched a "short and focused review", with an initial report pencilled in for July 7. His response to Mr Kwarteng read: "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.”
RAC fuel spokesman Simon Williams described the “speed and scale” of the rise in fuel prices as “staggering”, according to the PA News Agency. 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 added: “If they continue to go up substantially afterwards, we will be intrigued to hear what excuses the fuel trade has this time.”
