The Competition & Markets Authority has set out plans to step up monitoring of petrol and diesel prices as pump costs continue to rise amid the conflict in Iran.
Retailers operating forecourts across the country have been put on notice that formal requirements to supply revenue, costs and sales data will be brought forward for profitability analysis.
The results will be published in the CMA’s next road fuel monitoring update in spring, giving a clearer picture of fuel prices and retailer margins since the war began.
The CMA will also examine how quickly fuel prices rise and fall as wholesale costs change, and whether there is evidence of the so-called ‘rocket and feather’ effect of retailers being slow to pass on savings to motorists.
The CMA said it recognised businesses were likely facing significant pressures from rising energy costs which may impact prices, but warned they should not exploit the situation.
“Whilst price increases might be inevitable because of rising wholesale costs, it is important those increases reflect genuine cost pressures,” said CMA executive director for markets Juliette Enser.
“We will be closely scrutinising and reporting on what’s happening with fuel prices and calling out any concerning behaviour.”
In the CMA’s regular reporting, which assesses retail spreads looking at the average price drivers pay compared to the benchmarked price that retailers buy at.
While retail spread analysis could give a quick overview of trends in the sector, it was a less reliable indicator of competitive intensity than individual retailers’ fuel margins, which provide a clear breakdown of profits, the CMA said.
RAC head of policy Simon Williams said: “Drivers tell us the cost of motoring is a major concern, and fuel is a huge contributor to that, so making sure they’re paying a fair price at the pumps is essential. For that reason, we welcome the competition watchdog’s scrutiny of what’s happening on forecourts across the country.
“RAC Fuel Watch data shows average prices have rocketed in under two weeks with the average price of petrol increasing by 7p to 140p a litre and diesel by 16p to 158p. This has added £4 and £8 to the cost of filling up a family car.”
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