Set up an independent regulator to monitor and regulate vehicle fuel pricing

Create an independent pricing watchdog for vehicle fuel to ensure that fuel prices reflect changes in wholesale in their pump sale prices.

Analysis by the RAC indicates that retailers are currently overcharging motorists by £5m a day. This is unacceptable

It appears that companies increased fuel prices because of wholesale price increases during the Covid pandemic, but as wholesale prices fall, this is no longer reflected in their retail prices.

Creating an independent regulator for fuel prices would ensure that consumer interests were protected, and retailers held to account.

The Government understands that fuel prices are an important component of UK household and business expenditures, and is very sympathetic to the impact of domestic fuel costs on UK consumers.

The Department for Business, Energy and Industrial Strategy monitors and publishes weekly national average pump prices: https://www.gov.uk/government/statistical-data-sets/oil-and-petroleum-products-weekly-statistics

Commercially managed Apps or Websites are also available for motorists that provide price comparisons between petrol stations to help them to save money.

Petrol and diesel prices are mainly driven by the price of crude oil (priced in US$) and exchange rates. But are also influenced by a range of factors, which include the balance of demand and refinery capacity, levels of oil stocks, changes to the costs of biofuels and distribution, and retail margins.

Previous BEIS analysis has shown that, on average, both rises and falls in the price of crude oil are passed through to pump prices at equal rates over the course of some six weeks.

The recent rises in fuel prices have in large part been driven by the disruptions to the supply chain as a result of the unprovoked Russian invasion of Ukraine. It is right that the international community has taken action against the Russian economy to erode their ability to continue with this aggression, through the sanctioning and phasing out of Russian oil products The Government continue to engage constructively and regularly with industry and our priority is to ensure costs are managed whilst managing fuel supplies.

We recognise the pressures people are facing with the cost of living, which is why we have set out a generous £37bn package of support.

The Chancellor also recently announced measures to cut fuel duty by 5 pence a litre, building on 11 years of fuel duty freezes under the current Government. Cutting fuel duty will benefit anyone across the UK who uses fuel and represents savings for consumers worth around £2.4 billion over the next 12 months.

The Government are in regular contact with the fuel industry at all levels and have made it clear operators should do everything they can to ensure the fuel duty cut is passed on and reduce the cost to end users.

On the 11 June the Secretary of State, Kwasi Kwarteng, wrote to the Competition and Markets Authority (CMA) to request an urgent review of the fuel market, as well as a longer-term market study under the Enterprise Act 2002, to explore whether the retail fuel market has adversely affected consumer interests. This will include consideration of the health of competition in the market and any further steps that the Government or CMA could take to strengthen competition, or to increase transparency that consumers have over prices.

The Competition and Markets Authority published their review on 8 July and the Government is considering the findings of the review.

Department for Business, Energy and Industrial Strategy