UK government under pressure to act as petrol prices hit new record

Business minister concerned that March fuel cut is being hoarded by retailers and orders investigation

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Pressure on Britain's government to take action on fuel prices intensified after the average cost of petrol at UK forecourts climbed to a record 185 pence per litre — an increase of 7.1p in just a week.

The average price of diesel was 190.9p.

Following the 5p per litre fuel-duty cut in March, motoring group the RAC said a further reduction this week would be “very welcome, albeit overdue”.

If a further cut were mandated, then UK Business Secretary Kwasi Kwarteng would want assurances petrol retailers were passing it on to consumers after he ordered Britain's competition watchdog to investigate whether operators were pocketing it.

In a letter to the Competition and Markets Authority, he said people were “rightly frustrated” that the reduction had not stopped prices from soaring.

He said the investigation would find out why fuel prices were always quick to rise but slow to come down.

Oil and gas prices have surged worldwide, driven by Russia's invasion of Ukraine and economies reopening after the pandemic.

Britain reduced fuel duty by 5 pence per litre for one year in March in a £5 billion ($6.2bn) package to ease the burden on motorists amid a worsening cost-of-living crunch for households.

However, prices have continued to rise, and the average cost of filling a family car rose above £100 for the first time last week, according to data firm Experian Catalist.

“The British people are rightly frustrated that the £5bn package does not always appear to have been passed through to forecourt prices and that in some towns, prices remain higher than in similar, nearby towns,” Mr Kwarteng said.

He said the review should consider the health of competition in the market, regional factors, including localised competition, and any further steps that the government or the CMA could take to strengthen competition.

RAC fuel spokesman Simon Williams suggested that March's 5p cut was insufficient, even if retailers are passing it on, describing the “speed and scale” of the rise in fuel prices as “staggering”.

“This must surely put more pressure on the government to take action to ensure drivers don't endure a summer of discontent at the pumps,” he said.

“We hope the government's persistent talk about the importance of retailers passing on March's 5p duty cut fully is a precursor to an announcement of a deeper cut this week.

“If that's the case, it's very welcome, albeit overdue as the 5p cut has been well and truly overtaken by events on the wholesale market since then.”

Updated: June 14, 2022, 3:12 AM
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