Competition regulator to review soaring forecourt prices

The Competition & Markets Authority has agreed to investigate the road fuel market, after petrol and diesel prices hit fresh highs.

Prices at the pump have soared this year, pushed higher by a range of factors including surging inflation and the war in Ukraine.

In response, the government announced in March plans to cut fuel duty on petrol and diesel by 5p, to 52.95p per litre.

But despite that, prices have continued to rise, and Kwasi Kwarteng, the business secretary, has asked the CMA to investigate. In letter sent to the regulator’s chief executive, Andrea Coscelli, on Sunday, Kwarteng said there was “widespread concern” about the pace of prices at the forecourt.

He added that the duty cut “does not always appear to have been passed through to forecourt prices”, noting instances of price variations at petrol stations in neighbouring towns.

Replying, Coscelli agreed on Monday that the CMA would carry out a “short and focused review”, and provide government with advice on how to improve outcomes for consumers.

She added: “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.”

According to the RAC, the motorists' organisation, diesel currently costs around 190.92p per litre and unleaded petrol 185.04p per litre. Prices were just under 150p per litre at the start of the year.

Kwarteng has requested the CMA’s initial report by 7 July. The CMA said it would now engage with industry stakeholders and motoring organisations to ensure its analysis and conclusions were based on “solid evidence”.