Competition watchdog to be given new powers to tackle rip off fuel prices

Competition watchdog to be given new powers to tackle rip off fuel prices
The Competition and Markets Authority (CMA) is set to be given the authority to challenge fuel retailers who are unfairly increasing the price at the pumps.

Under new amendments in the Digital Markets, Competition & Consumers Bill, the CMA will become the body responsible for closely monitoring road fuel prices and reporting any sign of malpractice to the Government.

In fact, a new report from the CMA founds that major fuel retailers are taking far bigger margins than they have done in the past – and they will now be tasked to help reduce this gap.

The aim is to make the cost of petrol and diesel fairer for drivers.

Also, the CMA hopes their actions will improve competition in the market across the UK.

The new powers will ensure that fuel retailers, including supermarkets, will be forced to come clean on how much they are charging customers on their forecourts versus their profits.

Those that fail to comply could face a fixed fine from the watchdog of up to 1% of their worldwide turnover, or an ongoing fine of up to 5% of daily turnover.

Following the announcement, Energy Security Secretary Claire Coutinho said: “At a time when many were struggling with increased living costs, we saw shocking behaviour from some fuel retailers who failed to pass on savings at the pump.

“Now we are cracking down on any petrol station bosses found to be unfairly hiking up their prices.

“That’s why we’re giving the CMA new powers to bring fairness back to the forecourts and make sure UK drivers get a competitive fuel price.”

Alongside the Bill and the CMA’s new powers, the Government is planning to make it a legal requirement for fuel retailers to share daily price information that will help drivers to find the cheapest fuel near them.

There is currently a consultation on the design of Government’s open data scheme, which is due to launch this autumn.

Minister for Energy Consumer and Affordability Amanda Solloway said: “Today marks an important step in our commitment to stand by UK drivers as we continue to keep costs down for families.

“I’m pleased to see many retailers cooperate with the CMA so far, to share their price information and bring competition back to our petrol stations.

“I now urge comparison sites and others to get onboard to help UK motorists find the best local price for their fuel.”

Although the news is a positive step for drivers across the UK, the CMA powers are expected to come into force later next year.

Sarah Cardell, chief executive of the CMA, said: “We welcome this new responsibility and will use it to hold fuel retailers to account. The CMA is determined to revitalise competition in this sector so drivers can be confident they are getting the best price possible when they fill up their vehicles.”

RAC fuel spokesman Simon Williams continued: “We welcome the CMA being given new powers to take action against retailers that don’t pass on the savings they benefit from when wholesale fuel costs fall significantly. Due to our long-term monitoring of retail and wholesale prices, we have been calling for fairer, more transparent pricing for years.

“While the CMA’s report concluded the supermarkets had overcharged to the tune of £900m last year, our data shows this behaviour is continuing to this day with supermarket fuel margins more than double what they were before the pandemic.

“These new powers can’t come soon enough because, as it stands, the Treasury’s 5p-a-litre fuel duty discount is not making it to drivers at the pumps.”

What do you make of the announcement? Will this be a positive step in reducing the price of fuel for drivers across the country? Leave your comments below.

Brilliant breakdown + serious savings

Brilliant breakdown + serious savings

Breakdown cover from just £7.95 a month*. Plus up to £150 of driving savings!

Brilliant breakdown + serious savings

^For 1 nominated vehicle when added to Extra or Complete cover. New customers only. Ends 08/12/23. *New, single vehicle-based cover. £7.95 a month for Basic cover.