Fuel prices investigated by competition watchdog as petrol hits another record high

Record pump prices are causing ‘significant concern for millions’ says regulator

Britain Gas Prices (AP)

Fuel prices are to be investigated by Britain’s competition watchdog as pump prices hit another record high despite chancellor Rishi Sunak’s 5p per litre tax cut.

The average cost of a litre of petrol at forecourts climbed to 185p on Sunday, according to the AA – an increase of 7.1p in just one week.

The RAC described the “speed and scale” of the rises as “staggering”.

The Competition and Markets Authority (CMA) announced on Monday it will conduct a “short and focused review” of prices at the request of Kwasi Kwarteng.

The business secretary said Britons “are rightly frustrated” that the March tax cut “does not always appear to have been passed through to forecourt prices”.

Andrea Coscelli, chief executive of the CMA, responded: “High road fuel prices are causing significant concern for the millions of consumers and businesses who rely on being able to afford to fill up their vehicles.

“As you note, global factors, including the war in Ukraine, have been the principal driver of recent trends.

“But if competition is not working well in the retail fuel market, pump prices will be even higher than they need to be.

“With that in mind, the CMA will, as you request, carry out a short and focused review of the market, and provide advice to the government on steps that might be taken to improve outcomes for consumers across the UK.”

He added that the CMA will consider “what further work may be necessary” once the review is completed.

RAC fuel spokesman Simon Williams 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.”

AA fuel price spokesman Luke Bosdet said the rise in petrol prices “should be grinding to a halt” by the end of the week due to wholesale prices falling since the start of the month.

He went on: “If they continue to go up substantially afterwards, we will be intrigued to hear what excuses the fuel trade has this time.”

Mr Bosdet added that the “relentless surge” in wholesale and retail costs for diesel is “a nightmare” which will have a knock-on effect on delivery prices for goods and services.

It comes after research found high streets across Britain are losing £23m a day in potential consumer spending to record petrol prices.

The AA said the sum was going into fuel tanks rather than being spent in shops or bars and restaurants.