Motorists Left Carrying Can for Broken Fuel Market

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Categories: Constituency, Economics, Travel, UK Government (Westminster)

Stirling MP Welcomes Report on Fuel Prices, Urges Action

Local MP Alyn Smith has welcomed the publication of a report into road fuel prices by the UK industry watchdog – but has warned there must be consequences for noncompetitive forecourts. A publication by the Competition and Markets Authority (CMA) concluded that competition in this market is not working well, with a weakening of competition in retail since 2019. 

The report’s findings show that: 

  • From 2019-22, average annual supermarket margins have increased by 6 pence per litre (PPL). 
  • Increased margins on diesel across all retailers have cost drivers an extra 13 PPL from January 2023 to the end of May 2023. 
  • Motorway service stations are charging around 20 PPL more for petrol and 15 PPL more for diesel compared to other fuel stations. 

The report raised questions regarding the actions of supermarkets Asda and Morrisons in 2022, with each separately deciding to target higher profit margins. In response, other retailers including Sainsbury’s and Tesco also raised their fuel prices – moves indicative of a non-competitive market.

The CMA also found that diesel prices have been slow to drop in 2023, partially down to Asda ‘feathering its prices’ (reducing pump prices more slowly as wholesale prices fell) and other firms failing to compete in response.  As a result, the CMA estimates drivers paid 13 PPL more for diesel from January 2023 to the end of May 2023 than if margins had been at their historic average. 

Stirling MP Alyn Smith said:

‘Whilst I welcome this report from the CMA, under the UK Government’s watch regulators have been less than toothless when it comes to tackling uncompetitive markets and rip-off prices. The recommendations are a start, but we need to go further to assist motorists and communities in this cost of living crisis.

‘For the people I represent in Stirling, especially in our rural communities, high fuel prices have only added to the strain on household budgets. Clearly the market hasn’t been as competitive as it needs to be, and motorists are struggling to find the best prices – often it feels, by design.

‘I will watch closely if the suggested fuel finder scheme – which would enable drivers access to live, station-by-station fuel prices on their phones or satnavs, backed by a new ‘fuel monitor’ oversight body – will do its job and restore competition to this dysfunctional market.’

Notes:

More info: https://www.rac.co.uk/drive/news/fuel-news/cma-report-findings-signify-landmark-day-for-fuel-prices-in-the-uk/