The Competition and Markets Authority (CMA) have today released the latest report on the price of petrol and diesel and how drivers have been affected by the high prices. The Government regulator found that the majority of price increases for fuel over the last year are due to global factors like the Russian invasion of Ukraine.
However, fuel prices cannot solely be blamed on external factors, with retailers also bearing the brunt of the responsibility for the price hikes.
Based on evidence gathered as part of the Road Fuel market study, the higher prices drivers are paying at the pumps appear in part to reflect some weakening of competition in the road fuel retail market.
Fuel margins have increased across the sector, particularly for supermarkets, over the past four years, with the “Big 4” now being one of the most common places to fill up.
Because of this, average supermarket prices during 2022 appear to be around five pence per litre more expensive than they would have been if margins stayed at 2019 levels.
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The price of diesel has also been a sticking point for many drivers over the last year, with many motoring experts suggesting that it should be almost 15p cheaper.
Since March, the wholesale price of diesel has been cheaper than petrol, yet the current price of diesel is 10p more expensive.
Commenting on the findings, Sarah Cardell, chief executive of the CMA, said the rising cost of living is putting businesses and individuals under massive pressure.
She added: “Our Road Fuel market study is nearly complete. Although much of the pressure on pump prices is down to global factors including Russia’s invasion of Ukraine, we have found evidence that suggests weakening retail competition is contributing to higher prices for drivers at the pumps.
“We are also concerned about the sustained higher margins on diesel compared to petrol we have seen this year.
“We are not satisfied that all the supermarkets have been sufficiently forthcoming with the evidence they have provided in our Road Fuel market study, so we will be calling them in for formal interviews to get to the bottom of what is going on.
“It is a priority for the CMA to publish a full and final report, including recommendations for action, by the beginning of July.”
According to RAC Fuel Watch, the average price of petrol is 144.95p compared to diesel which costs 154.31p. Super unleaded remains the most expensive at £1.60 a litre.
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The report stated that supermarkets had not been “sufficiently forthcoming with the evidence they have provided”, including data being submitted late.
The CMA stated it would conduct formal interviews with the supermarkets’ senior management in order to get to the heart of the issues, with a final report expected no later than July 7.
Edmund King, President of the AA, said the findings were “hugely welcome” for millions of drivers getting a “raw deal” at the pump.
He added: “Hopefully, it will compensate for the damage done to family and business finances by bloated pump prices since 2021.
“The AA has been campaigning for many years to get more transparency in fuel pricing.
“If ever a business sector needed a major shake-up, it’s the fuel trade – critical to the cost of living, family finances, transport costs and inflation.
“Since the pandemic, competition between forecourts has too often and in too many places been non-existent.
“The current diesel price scandal and the fiver-a-tank cost difference between neighbouring communities are just two examples.
“More recently, a handful of maverick small forecourts slashing prices, saying they can still stay commercially viable, has exposed the shame of the other retailers.”
The CMA report also looked into the price of groceries and found that there are no specific competition concerns within the sector, but announced it would step up its work in the industry.
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