A full review into how to stop the rising cost of fuel in the UK has been launched, a government watchdog’s report has said today, after it raised a “cause for concern” over the price of fuel.
It follows an urgent review undertaken by the Competition and Markets Authority (CMA), which found that there was, on average, a difference of around 10p per litre on the wholesale price of fuel being bought by retailers and what it was selling it for at the pumps.
The price rise has taken hold in recent weeks, with the cost of wholesale fuel falling by 5p but pump prices still increasing to an average of 191.43p for petrol and 199.05p for diesel.
However, the CMA said this was not the most significant contributor to the rise. Instead, it found that high pump prices were being driven by the record cost of crude oil and the growing gap between that price and the wholesale cost of petrol and diesel – the so-called ‘refining spread’. A 160-litre barrel of crude oil currently sits at around $128.85 (£107.87).
The report noted: “The retailer spread is volatile, and the CMA is aware that in recent weeks, it has grown larger. The CMA will be monitoring this closely as it takes forward the market study.”
“Significant differences” were also found between forecourt prices in urban and rural areas and the CMA said further investigation was needed.
The CMA was also asked by the UK government to advise on possible measures “to increase the transparency that consumers have over retail prices”. It has recommended an open data scheme to help consumers access and compare local pump price information - especially for motorway services.
It confirmed the review will be published in the autumn.
Sarah Cardell, CMA general counsel, said: “The recent rises in pump prices are a major worry for millions of drivers. While there is no escaping the global pressures pushing up fuel prices, the growing gap between the oil price and the wholesale price of petrol and diesel is a cause for concern.
“We now need to get to the bottom of whether there are legitimate reasons for this and, if not, what action can be taken to address it.”
She added: “On the whole, the retail market does seem to be competitive, but there are some areas that warrant further investigation. These include finding out whether the disparities in price between urban and rural areas are justified.”
Jack Cousens, the AA’s head of roads policy, said: “Pump price competition in the UK is broken. A month of major wholesale price falls without a penny coming off the average pump price of petrol is testament to that.”
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On the up side we no longer have fuel shortages. Maybe if we all used a bit less of the stuff then the rules of supply and demand would result in cheaper prices. It certainly worked during the pandemic!
Whatever their findings are, there's one thing that's highly unusual in our area right now and to the best of my knowledge I've never seen before.
To justify the cheaper prices, they tell us supermarket fuel is inferior to big brands. To justify it's cheaper price, they tell us supermarkets sell fuel at cost or even at a loss to attract customers in-store.
Well, for the past few weeks our local BP and Shell stations have been selling fuel CHEAPER than the supermarkets have. Our local Tesco is the most expensive, then it's Sainsburys and Morrisons at the same price. You can save a penny filling up at the surrounding Shell stations, 2p at the local BP station ( there's only one ) or 4p at the local JET station. This doesn't just reflect daily price variations, this has been consistantly the case over the past few weeks.
Of course it's not just fuel that's using Ukraine as the scapegoat for increased prices, it's happening everywhere. A barrel of fuel is nowhere near record prices yet the price we're paying is. Somebody is making HUGE profits out of this. Probably the last thing they want is for the war to stop in Ukraine. It's disgusting.