The Competition and Markets Authority has published its latest road fuel monitoring report, setting out how the conflict in the Middle East has affected what drivers pay at the pump.
The report also assesses fuel margins – the difference between the price petrol stations pay for fuel and the price they sell it at – and provides an update on Fuel Finder registration and enforcement.
In its previous report, published in June, the CMA found that the conflict had caused a rapid increase in wholesale fuel costs, which had been passed on to drivers through higher prices and that historically high margins remained a concern.
Overall, the CMA’s analysis indicates that lower wholesale prices led to prices at the pump falling in June, although prices remained significantly above pre-conflict levels. The CMA has not found evidence that retailers actively changed their pricing strategies to take advantage of the crisis.
However, the CMA remains concerned that the continued use of passive pricing strategies by the majority of retailers is contributing to sustained high margins. The CMA’s analysis indicates that some retailers did not immediately pass reductions in wholesale diesel prices on to drivers – a move which would have intensified competitive pressure on rival retailers.
Given these findings, the CMA will continue to actively monitor and undertake a more detailed review in the autumn. The autumn report will include further analysis of retailers’ pricing strategies, whether wholesale price changes are reflected in retail prices in a timely manner and the reasons why fuel prices vary between local areas – with a view to ensuring that customers are paying a fair price for fuel wherever they live.
Sarah Cardell, Chief Executive of the CMA, said, “We know prices at the pump are putting real pressure on drivers’ pockets and our monitoring plays an important role in giving drivers confidence that retailers are not taking advantage of the conflict in the Middle East.
“We will continue to monitor prices and margins closely and expect any reductions in wholesale prices to be rapidly and fully passed on to drivers. “
In the meantime, Fuel Finder can help drivers save money when they fill up. The more motorists make use of Fuel Finder-backed services, the better it works – saving money now and driving down prices in the long run.
RAC head of policy Simon Williams said, “It’s very concerning that margins on fuel remain historically high, competition is still lacking and that some retailers were deemed not to have reduced prices as quickly as they should have when the diesel wholesale price fell earlier in the summer.
“We’re therefore pleased the CMA is going to be taking a closer look at retailer pricing strategies and whether wholesale price changes are reflected at the pumps fast enough. We also urge the watchdog to compare fuel retailing in Northern Ireland with the rest of the UK, as petrol and diesel are currently being sold there for an average of 8p less a litre – meaning the cost of filling a family car in Northern Ireland is around £4.40 less than elsewhere. If fuel can be sold there at lower prices, then it seems drivers elsewhere aren’t being treated fairly.
“It’s positive that drivers can now find prices for 99% of fuel sold in the UK on Fuel Finder. We urge every driver to use fuel comparison tools such as the myRAC app to make sure they buy the cheapest fuel near them.”
