Fuel giants urged to pass on tax savings

FUEL giants are under fresh pressure from Downing Street to pass on tax cuts to motorists as diesel prices hit a new high.

Business Secretary Kwasi Kwarteng has written to the industry “to remind them of their responsibilities” following claims retailers hiked profits following the 5p per litre fuel duty cut.

Figures from the Department for Business, Energy and Industrial Strategy show the average price of a litre of diesel at UK forecourts was 179.7p on Monday.

That was up from 178.4p a week earlier.

The average price of petrol on Monday was 165.1p per litre.

That was narrowly below the record of 165.4p set on March 21, based on the Government’s figures.

Separate fuel price statistics by data firm Experian Catalist using a different methodology show average prices on Monday were 180.3p per litre for diesel and 166.8p per litre for petrol.

Chancellor Rishi Sunak implemented a 5p per litre cut in fuel duty on March 23 to help cash-strapped motorists.

But the RAC said retailers are taking an average profit of 2p per litre more than before the policy was introduced.

The firm’s analysis showed the average margin for a litre of petrol and diesel is currently 11p and 8p respectively. In the month up to the duty cut it was 9p for petrol and 6p for diesel.

In his letter, Mr Kwarteng said the British people are “rightly expressing concern about the pace of the increase in prices at the forecourt”, and are “rightly frustrated that the Chancellor’s fuel duty cut does not appear to have been passed through to forecourt prices in any visible or meaningful way”.

“It is also unacceptable that different locations even within the same retail chain have widely different prices,” he wrote.

“The Chancellor and I therefore want to re-emphasise and communicate again our expectation that members do everything possible to ensure that drivers are getting a fair deal across the country.”

The Business Secretary said that, as a result of “perceived intransigence to date”, his officials recently engaged the Competition and Markets Authority about the issue, and the regulator has been “closely monitoring the situation”.