In this section you will find information related to petrol, diesel and oil prices, and levels of fuel taxation.
Competition and Markets Authority consideration of fuel prices
Following an increase in petrol and diesel prices in early 2022, the UK Government asked the Competition and Markets Authority (CMA) to consider what had led to the increases and whether the consumer was still getting a good deal. Following an initial rapid review and subsequent, fuller consideration, in the summer of 2023, the CMA reported on its findings.
While they "did not find any deficiencies that required action in relation to the functioning of the UK market [for wholesale or refining]", there were a number of concerns raised in the retail market including:
- [Supermarkets] taking a less aggressive approach to pricing by significantly increasing their internal margin targets for fuel over recent years
- "Drivers have been paying more than would otherwise have been the case." With the CMA estimating "that the financial impact of the 6 pence per litre (ppl) increase in average supermarket fuel margin from 2019 to 2022 results in a combined additional cost of around £900m for customers of the four supermarket fuel retailers in 2022"
- "Significant price differences between local areas, with lower prices typically associated with having a supermarket competitor,...though this effect has weakened since January 2022."
- "Consumers will generally be able to make savings on fuel within a reasonable drive time, but the cheapest provider is not always consistent."
The CMA also made two recommendations to Government for change:
- The government should create, on a statutory basis, an open data fuel finder scheme. This would require retailers to share their prices on an open, real-time basis, meaning that drivers can easily compare prices in any area of the UK.
- The government should create a fuel monitor function within an appropriate public body, to monitor developments in the market, both nationally and locally, as we move through the net zero transition, provide ongoing scrutiny of prices and consider whether further action may be needed to protect consumers.
Both recommendations have been accepted along with a third suggestion to create a voluntary price reporting scheme akin to the above fuel finder scheme (but without the delay of waiting for legislation).
As such, fuel retailers have been encouraged to sign up to voluntarily report their prices daily on their own websites and provide the relevant link to the CMA via an email to roadfuel.remedies@cma.gov.uk It is anticipated that this increased transparency will enable customers to shop around more for the best deal in their area.
The full findings and information on the investigation by the CMA can be found: Here
More information on pump prices
The fluctuating price of fuel at the pump for petrol and diesel is the result of more than just production and distribution costs. When paying at the pump, factors at play include the crude oil price, the price of biofuels when in the fuel, delivery and distribution costs, Fuel Duty (FD), Value Added Tax (VAT), greenhouse gas obligations, development fuel obligations and forecourt costs and profits.
