Fuel prices have come down from record highs, but remain higher than pre-pandemic levels.
While wholesale fuel prices have fallen steadily, petrol and diesel prices at the pumps have not declined as quickly.
Now an investigation by the Competition and Markets Authority (CMA) into the UK fuel market has found that competition within the industry is 'not working as well as it should be', with savings not being passed on to consumers.
The introduction of a new scheme aims to change that.
What has the Government announced and why?
Supermarkets have traditionally been among the cheapest places to buy fuel, but competition has been lacking lately, with most major supermarkets raising their margins and charging more.
The CMA found that:
On average, this has led to supermarkets charging an extra 6p per litre for petrol over the last year. This price hike was worse for diesel, costing an extra 13p per litre from January to May.
The government has decided to act by changing the law to force all fuel retailers to share their pricing information on a regular basis. This would then be published and continuously updated, with live station-by-station fuel prices made public. This would be accessible to motorists via an app on their smartphone or through their satnav.
All major UK supermarkets have said that they welcome the idea of a price transparency scheme, as have groups such as the AA and RAC – both of whom have been campaigning for such a scheme for over a decade. Similar initiatives are already being used in some parts of Europe.
The formation of a new governmental body, currently known as the ‘fuel monitor oversight body’ would also be introduced. They would scrutinise current fuel prices on an ongoing basis and would, in the event that competition continues to weaken, recommend further action.
What will it mean for petrol and diesel prices in the UK?
Currently, retailers only provide pricing information at their local stations, making comparing prices difficult. There are some websites that attempt to compare prices, but these aren’t always reliable or accurate.
The introduction of easily accessible, live pricing information on a station-by-station basis should mean that motorists will favour their cheapest local station. This in turn would pressure supermarkets and other fuel retailers to lower their prices to remain competitive.
A similar scheme is already active in Northern Ireland and has been broadly successful in lowering prices at the pumps.
The potential goes beyond supermarkets and may mean that other fuel retailers are also forced to lower their margins and become more competitive to compete. Motorway service stations are currently the biggest offenders, with a whopping 20p per litre margin for petrol prices and 15p per litre for diesel.
This scheme should also help those living in more remote areas, with far more limited choices, also gauge a fair price in their location.
When will the new law come into force?
Although the government has officially announced this scheme, no concrete date has yet been announced for its release. The AA have called for this to be in place before the end of the year.
How you can save on petrol and diesel right now?
source https://www.which.co.uk/news/article/supermarket-petrol-price-announcement-heres-what-you-need-to-know-aancO3l6LVvj