Inquiry launched into UK’s high fuel prices

The UK competition regulator has launched an investigation into the high cost of petrol and diesel at forecourts across the country.

The in-depth study by the Competition and Markets Authority (CMA) will look at the price differences between rural and urban areas, as well as the growing gap between the price of crude oil when it enters refineries and the wholesale price when it leaves refineries as petrol or diesel.

In an urgent review of the market published on Friday, the CMA found that although there were concerns about some retailers profiting from the current situation, this has not been a big contributor to the overall rise in pump prices.

Just over 40% of the growth in fuel prices (24p per litre) was attributed to increases in how much refineries are charging retailers for wholesale petrol and diesel.

The dollar-terms increase in oil prices over the last year accounts for around a third of the rise in fuel prices (20p per litre), with the fall in the value of sterling in that period adding a further 12% (7p per litre).

Sarah Cardell, CMA General Counsel, said: “While there is no escaping the global pressures pushing up fuel prices, the growing gap between the oil price, and the wholesale price of petrol and diesel, is a cause for concern. We now need to get to the bottom of whether there are legitimate reasons for this and, if not, what action can be taken to address it.

“On the whole the retail market does seem to be competitive, but there are some areas that warrant further investigation. These include finding out whether the disparities in price between urban and rural areas are justified.”

Cardell added that the CMA will use its formal legal powers to investigate the market in more depth, adding: “If evidence emerges of collusion or similar wrongdoing, we won’t hesitate to take action.”