CMA investigating fuel retail market
A review by the Competition and Markets Authority (CMA) has found that fuel retailers raised prices quickly in line with higher wholesale costs but were slow to reduce them again when prices fell.
Called ‘rocket and feathering’, this practice has been revealed as part of the CMA’s Road Fuel Market Study, which was launched in July and allows the CMA to use compulsory information-gathering powers to probe the entire fuel market in the UK. This includes company financial data from retailers, refiners, and wholesalers.
It found prices rose by around 50p a litre from January to July, the largest leap in fuel prices ever recorded in one year, before falling by 31p for petrol and 14p for diesel since.
Interim chief executive Sarah Cardell said: “It has been a terrible year for drivers, with filling up a vehicle now a moment of dread for many. The disruption of imports from Russia means that diesel drivers, in particular, are paying a substantial premium because of the invasion of Ukraine. A weaker pound is contributing to higher prices across the board too.
“There are no easy answers to this. The question for the CMA is whether a lack of effective competition within the UK is making things worse. Although it is only a small proportion of the overall price, the increase in margins for many fuel retailers over the last few years is something we need to investigate further. The key thing we need to establish next is whether this development is down to competition problems or not.”
