The UK Government has announced plans to implement a fuel price reporting scheme that will require retailers to publicly disclose their prices at the pump.
This initiative aims to provide consumers with real-time price information, enabling them to compare fuel prices in different areas and identify retailers who are offering fair prices and passing on savings from falling wholesale costs.
The government intends to change the law to ensure that retailers comply with this new requirement, which is expected to promote transparency and competition in the fuel market. By increasing price transparency, the government hopes to drive down prices and alleviate the burden on people's cost of living.
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The scheme will make pricing data accessible to third-party entities, paving the way for the development of price comparison apps and websites. This move not only supports the digital economy but also fosters growth in the market by enabling consumers to make more informed choices.
The decision to enforce these measures comes in response to a recent report by the Competitions and Markets Authority (CMA) that revealed some supermarkets were charging motorists an extra 6p per litre of fuel. This discrepancy resulted in an additional cost of £900 million for drivers in 2022 alone, amounting to approximately £75 million per month.
To ensure ongoing oversight of the UK road fuel market, the government plans to grant new powers to a new public organisation. This organization will closely monitor fuel prices, scrutinise market dynamics, and promptly alert the government if further intervention becomes necessary.
Grant Shapps, the Energy Security Secretary, commented:
"Some fuel retailers have been using motorists as cash cows – they jacked up their prices when fuel costs rocketed but failed to pass on savings now costs have fallen."
"It cannot be right that at a time when families are struggling with rising living costs, retailers are prioritising their bottom line, putting upwards pressure on inflation and pocketing hundreds of millions of pounds at the expense of hardworking people."
"Today I’m putting into action the CMA’s recommendations and standing by consumers – we’ll shine a light on rip-off retailers to drive down prices and make sure they’re held to account by putting into law new powers to increase transparency."
The CMA report uncovered concerning trends in the fuel market, including a decline in competition and an overall increase in retailers' profit margins, particularly with regard to diesel. Supermarkets were identified as the worst offenders in this regard. Additionally, the report highlighted a lack of reliable and comprehensive price information available to motorists.
In response to the CMA's findings, the government has agreed to implement the mandatory public disclosure of fuel prices and establish a monitoring body to oversee the market. The specific design of the open data scheme and market monitoring function will be subject to public consultation later this year, with corresponding legislative changes required to enact the new measures. In the interim, the CMA will introduce a voluntary scheme to encourage fuel retailers to share accurate and up-to-date road fuel prices for publication by August. The CMA will continue to monitor fuel prices using its existing powers.
The UK's decision to implement such a scheme follows a successful similar initiative in Germany, which bolstered competition among fuel retailers. In Queensland, Australia, motorists who took advantage of a statewide scheme were able to save an average of $93 per year.
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