UK watchdog to track down causes of widening fuel margins
The UK’s antitrust watchdog says that it will investigate widening retail fuel margins in what it called the “most volatile year for fuel prices since reliable records began”.
The Competition and Markets Authority (CMA) said on Tuesday that annual retailer fuel margins, the difference between what retailers pay for fuel and the pump price, rose by 2p to 3p a litre on diesel and 3p to 4p a litre on petrol from 2017 to 2021, according to the interim findings in its market study.
The authority said that cost rises for retailers or competition issues could be the cause and it will investigate further. Petrol prices are at record highs across the world, in part because of a refining bottleneck but also in the wake of Russia’s invasion of Ukraine and the disruption the conflict caused in oil markets.
The British government gave the CMA the task of making sure that the market is working for consumers.
“It has been a terrible year for drivers, with filling up a vehicle now a moment of dread for many,” said Sarah Cardell, interim CEO at the CMA.
“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,” said Cardell. The regulator launched its investigation in July after an urgent review ordered by the government found a range of issues of concern.
The refining spread — a growing gap between the cost of crude oil and wholesale petrol and diesel — was said to be causing the biggest trouble after it ballooned after Covid-19 refinery closures. The CMA will publish the full report in 2023.
In its latest update, the CMA emphasised that refining problems were not down to competition problems but largely influenced by global supply and demand. Elsewhere, it flagged that prices vary widely among local UK areas, and it will be scrutinising the reason for these differences.
The cost-of-living crisis, being worsened by high petrol prices, has been an issue at the top of the competition agency’s priorities. The CMA has warned of dire consequences if any business is seen to be taking advantage of the situation by illegally colluding to raise prices. /Bloomberg
IT HAS BEEN A TERRIBLE YEAR FOR DRIVERS, WITH FILLING UP A VEHICLE NOW A MOMENT OF DREAD FOR MANY