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The UK competition watchdog has warned fuel retailers it is stepping up its monitoring of pump prices amid concern over profiteering as the US war with Iran drives up wholesale costs.
The Competition and Markets Authority (CMA) said firms responsible for thousands of filling stations across the country had been “put on notice” amid a wider government crackdown to stop bosses ramping up profits at the expense of consumers.
The watchdog said it would require firms to provide their revenue, costs and sales data, accelerating a review of fuel industry margins it initiated after the conflict began just under a fortnight ago.
Against a volatile backdrop in global energy markets, the oil price rose past $100 (£75) a barrel on Thursday for a second time in a week, as widespread Iranian attacks on energy facilities across the region and a threat to continue blocking the strait of Hormuz overshadowed a vast release of government reserves.
Petrol and diesel prices have risen sharply, alongside a jump in the cost of home heating fuel. Experts have warned a sustained rise in global oil and gas prices would trigger higher inflation in Britain, dashing hopes for the Bank of England to cut interest rates at its next policy meeting.
Figures published by the RAC on Thursday show the average petrol price has increased by 5.5%, which is about 7p a litre, since US and Israeli warplanes began bombing Iranian targets almost two weeks ago, while the average diesel price is up 11.1%, nearly 16p.
Rachel Reeves warned earlier this week the government would not tolerate companies exploiting the crisis to make “excess profits”, and said she would ask the CMA to step up its vigilance.
The chancellor is expected to hold meetings with fuel industry bosses and energy companies alongside the energy secretary, Ed Miliband, to warn that the government expects drivers and households to get a fair deal.
The CMA said it recognised that businesses were likely to face significant pressures from rising energy costs, which could have an impact on prices.
However, it warned firms not to exploit the situation. The watchdog said it would analyse how quickly fuel prices rose and fell as wholesale costs change to examine if there was evidence of so-called “rocket and feather” pricing – when rapid price increases are followed by slower price cuts.
Late last year the CMA had said it was “deeply concerned” at signs that some fuel retailers were overcharging motorists.
Earlier this year the government launched its fuel finder scheme, which enables drivers to compare real-time fuel prices using smartphones and online. However, a minority of fuel retailers currently do not provide data to the service.
Juliette Enser, the CMA’s executive director for markets, said: “While price increases might be inevitable because of rising wholesale costs, it is important that those increases reflect genuine cost pressures.
“We will be closely scrutinising and reporting on what’s happening with fuel prices and call out any concerning behaviour.”
