The PRA has praised independent forecourts for competing well on price and undercutting supermarkets in the wake of fierce media criticism that fuel retailers have been overcharging at the pumps.
The press onslaught prompted a letter to fuel retailers from Grant Shapps MP, Secretary of State Department for Business, Energy & Industrial Strategy, who said he was concerned to see that the initial findings of the review into the fuel retailing sector by the Competition & Markets Authority (CMA) pointed to retail fuel margins rising year-on-year over the past five years ahead of general inflation.
In addition, he said CMA analysis found evidence that on occasion the price of fuel at the pump has ”fallen more slowly than it rises” following changes in the price of crude oil.
”As a result, the CMA will continue to investigate the retail sector further, with a focus on the relationship between wholesale and retail fuel prices, factors driving local and regional variations in prices, and the role played by major supermarkets in the road fuel retail sector,” he said.
”The pressure on consumers, particularly during the festive period, is greater than it has been for a very long time. You will have seen recent reports in the media suggesting retailers, particularly supermarkets, are not passing on wholesale savings to motorists swiftly enough.
”This Government is committed to ensuring retailers are offering a fair deal at their forecourts. I therefore welcome the focus the CMA will be placing on the role of retailers and urge you all to engage fully, openly and transparently with the CMA to explain changes in pricing behaviour.
”I will be looking very closely at the CMA’s conclusions, in particular any recommendations they make regarding remedial action in the sector. Ahead of this, I encourage you to take any steps necessary to ensure savings are passed on to consumers. This Government will not hesitate to act to ensure competition is healthy and consumers get a fair deal on their fuel.”
The RAC triggered the round of attacks on the fuel retailing sector when it issued a media release reporting that this Christmas would be the most expensive ever on the roads with petrol and diesel both at record highs for the festive period. (See story.)
With petrol being sold for an average of 152.96ppl (7ppl more than it was on 22 December 2021 (145.66p); and diesel 27ppl more expensive on the nation’s forecourts than it was a year ago (148.95ppl) at 175.75ppl, the RAC claimed ”disturbingly this Christmas should not be hurting drivers’ pockets as much as it is as the wholesale price of petrol has now fallen to just 106p a litre – the same price it was this time last year.
It also commented on the fact the prices include the Government’s 5ppl fuel duty discount which was introduced in March to ease the pain of rising fuel prices caused by Russia invading Ukraine. It said the wholesale price of diesel has dropped to 126ppl which is only 14ppl more expensive than just before last Christmas (112ppl).
The RAC calculates that the average price of petrol should be around 138p – 15p cheaper than it actually is, and that diesel should be around 160ppl – 13ppl cheaper than it is now.
Gordon Balmer executive director of the PRA said: “I am pleased to note that independent forecourts are competing well on price and in many cases undercutting supermarkets”.
”Competition is a matter for the Competition and Markets Authority who are conducting a review into road fuel pricing and the PRA is fully cooperating on this matter. My advice to motorists is that the market is dynamic and therefore encourage everyone to shop around”.
He also commented on an article in the in the Times: “The RAC is a motoring organisation. I would not comment on the economics of roadside repairs, so I wouldn’t expect them to pass judgment on the economics of fuel either.”
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