Government will ‘not hesitate’ to ensure retailers pay fair fuel price to drivers

Fuel retailers have been threatened with state intervention over prices by the Business Secretary, who has urged companies to “take any steps necessary” to ensure affordable prices for drivers.

In a letter to retailers on Thursday, Grant Shapps said the government “will not hesitate to ensure that competition is healthy and that consumers get a fair deal on their fuel.”

The trade minister said the Competition and Markets Authority (CMA) would “continue to further investigate the retail sector” looking at the “relationship between wholesale and retail fuel prices”.

It was “alarming” to see that the regulator had discovered “year-on-year retail fuel margins rising in the last five years ahead of normal inflation”.

There was also evidence that “at times” fuel prices “fall more slowly than they rise following changes in the price of crude”.

The competition watchdog will also examine “the factors driving local and regional variations in prices and the role played by major supermarkets in street fuel retail”.

While there has been an increase in the prices of petrol and diesel passed on to consumers, there has been no difference in wholesale prices of petrol by retailers and only a marginal increase for diesel, according to RAC data.

Consumers face an additional £4 average cost to fill up a full tank of petrol at £84, while an average tank of diesel is now £15 more expensive than a year ago, coming in at £97 .

RAC fuel spokesman Simon Williams welcomed Shapps’ intervention and said it hoped the letter “leads to some long-term low prices on supermarket forecourts that more accurately reflect the fall in wholesale fuel costs”. “

There had previously been concern that the government’s cut to fuel charges in March had not been passed on to consumers, however Shapps said on Thursday he was “encouraged” to see Brits have now felt the effects of the savings.

A CMA spokesman said: “Following our urgent review over the summer, we are now using our mandated information-gathering powers to investigate the whole of the road fuel market.

“We will continue to gather evidence to inform our work ahead of our next update, which we will publish in the spring.”

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