The government is investigating the price of fuel in the UK.

It comes after  Business Secretary, Kwasi Kwarteng, questioned whether petrol stations had actually passed on the 5p per litre cut announced by the Chancellor, Rishi Sunak last month.

Where’s the 5p

The Competition and Markets Authority (CMA) has been asked to investigate. It will look at the 5p cut but also the overall pricing of diesel and petrol across the UK. Kwarteng questions whether petrol stations are giving motorists a fair deal especially considering the wide variation in pump prices around the country.

It is the CMA who are responsible for regulating competition across the UK.

Concerns are in the increase as the cost of living crisis increases its grip on the nation. With inflation at around 10% and more workers demanding pay rises, fears for inflation are growing. Fuel prces have been hit by post pandemic demand but even more by the war in Ukraine. With the cost of fuel now approaching £2 per litre, it will further increase prices of all goods as transport costs increase.

Breaking records

In a letter to the CMA’s Chief Executive, Dr Andrea Coscelli CBE, the Business Secretary notes that drivers are frustrated by the record increases in pump prices. Record rises are occurring on a daily basis with little sign of a pause or reduction.

Kwarteng says that the fuel duty cut “does not always appear to have been passed through to forecourt prices.

“Drivers should be getting a fair deal for fuel across the UK.

“Healthy competition between forecourts is key to achieving this, with competition working to keep pressure on prices.”

It asks that an urgent review be conducted into why disparities remain between fuel providers, and how prices can “remain higher than in similar, nearby towns”.

Searching for a saviour

More over, the CMA will also be tasked with conducting a larger, longer-term, review into how the fuel market operates in the UK. This will be performed under the Enterprise Act 2002.

As part of this larger review, the CMA is tasked with discovering if “the retail fuel market has adversely affected consumer interests” in the UK. It will be asked to consider whether there are any additional steps the Government, or the CMA itself, could take to help.

An initial report into fuel prices has been requested from the CMA by 7 July 2022.

Milestones

Fuel prices have crossed an ominous milestone. Last week saw the RAC report that the average cost of filling a family car has passed the £100 mark.

RAC fuel spokesperson Simon Williams said: “March’s 5p fuel duty cut now looks paltry as wholesale petrol costs have already increased by five-times that amount since the Spring Statement”.