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Fuel retailers will be required to disclose profit information or face hefty fines from next year, under new powers given to the UK competition watchdog as it seeks to tackle high prices at the pump.
The measures announced on Wednesday by the government come after energy company Shell and service station operator Moto did not voluntarily submit data on their margins to the Competition and Markets Authority.
The regulator has been monitoring fuel prices as it attempts to address cost-of-living pressures on drivers in response to concerns over unfair pricing by retailers as wholesale fuel costs fall.
Failure to submit the information could lead to fixed fines of up to 1 per cent of worldwide turnover for retailers, or recurring fines of up to 5 per cent of daily turnover if concerns are not addressed, the Department for Energy Security and Net Zero said.
Sarah Cardell, CMA chief executive, said retail price trends in recent months indicated that “competition is still not working well in this market to hold down pump prices”.
The measures are expected to come into force next year as an amendment to the Digital Markets, Competition and Consumers bill, which is designed to bolster consumer protections.
The CMA last week said that petrol station prices were not falling in line with wholesale fuel costs. The difference between the average price drivers paid at the pump and the price retailers buy fuel was 17-18 ppl at the end of October, “significantly higher” than the long-term average of 5-10 ppl, the regulator said.
But the CMA also acknowledged that rising petrol prices from June to August were likely driven by global factors such as increasing crude oil prices.
The RAC Foundation, an automotive services group, welcomed the measure. “There’s definitely a stick being waved now and hopefully it will make the difference in the cost of living crisis when drivers need to afford fuel at the pump,” said Simon Williams.
He noted that retailers have been grappling with higher wage costs and a fourfold increase in petrol theft on 2019 levels. The purchase of Asda and Morrisons by private equity backed investors in recent years has also left the supermarkets saddled with significant loans to service.
Margins on fuel at supermarkets fell from 11.9 ppl in May to 7.3 ppl in August, based on data provided to the CMA voluntarily by Asda, Tesco, Sainsbury’s and Morrisons. The fall was a potential sign of stronger competition, the CMA said.
But the regulator added that the fall “should not be overstated” owing to a widening gap between retail and wholesale prices from September to October.
The CMA was unable to analyse fuel margins for non-supermarkets as Shell and Moto did not provide data.
Shell said it had “co-operated in full” with a study into fuel market pricing by the regulator from June 2022 to July 2023. It noted that “requests for commercially sensitive information are best addressed through regulation, we understand that the Digital Markets, Competition and Consumer bill is amended to address this”.
Ken McMeikan, chief executive of Moto, said the company had complied with the regulator’s previous study and “subsequently committed to providing data to the CMA in response to their ongoing voluntary request for information”.
Announcing the measures, Claire Coutinho, secretary of state for energy security and net zero, said: “At a time when many were struggling with increased living costs, we saw shocking behaviour from some fuel retailers who failed to pass on savings at the pump.”
“Now we are cracking down on any petrol station bosses found to be unfairly hiking up their prices.”
Source: Economy - ft.com
