Road Fuel Monitoring report reveals lack of competition
Drivers are paying more for fuel than they should in a competitive market, according to the latest CMA Road Fuel Monitoring report.
It found that retail margins increased in March and April, with competition between suppliers not suppressing price increases.
While the price rises can be attributed to the war in Iran, the report also concluded that ‘passive’ pricing policies have contributed to high prices at the pumps.
The report said: “In a well-functioning road fuel market, we would expect that retailers would reduce prices to win market share from their competitors, with rivals being forced to respond to remain competitive.
“However, we have continued to see retailers pursuing largely passive pricing policies, rather than actively competing to win customers. We remain concerned that drivers are likely to be paying more than they otherwise would in a more competitive environment.”
Competition lacking
In response, the RAC head of policy Simon Williams said: “It’s positive to have confirmation retailers haven’t altered their pricing strategies as a result of the Iran war, but it’s worrying the watchdog has concluded competition is still lacking in the road fuel market and that margins are still at historically high levels.
“The government’s new Fuel Finder, introduced at the start of February, is supposed to help with that but it’s still early days.
“The August CMA report will be very interesting as it will cover a period of lower wholesale prices. The wholesale price of diesel has already come down considerably but prices at the pumps have only dropped by around 8p since peaking on 15 April at 191.54p.
“The price of oil has now been under $100 a barrel for almost a week which is another positive sign for drivers and potentially a test for retailers as it should lead to lower forecourt prices.”
