Association of Convenience Stores (ACS) today (8) has welcomed a new Competition and Markets Authority review into the fuel market, which highlights the drivers of increased fuel costs.
The review, which was ordered in June by the Business Secretary, was requested after the price of petrol and diesel increased by over 60p in the last year.
The review outlines the main factors affecting the increase in the fuel price as: the crude oil price; the fall of the value of sterling against the dollar; and a growing gap between the crude price and the wholesale price (the refining spread).
One area of concern raised ahead of the review by campaigners focused on whether the 5p cut in fuel duty on 23 March was passed on to customers. In the review, the CMA state that they see ‘no evidence… that retailers in aggregate have profited from failing to pass on the duty cut’, noting that there were price reductions in fuel from supermarkets, company operated sites, and independent forecourts alike.
In their summary of the review, the CMA states that “although there are concerns from some about fuel retailers profiting from the current situation, our review finds that over the course of a year, the gap between wholesale prices and retail prices (the ‘retailer spread’) has not been a significant contributor to the overall rise in pump prices.”
ACS chief executive James Lowman said: “We welcome this urgent review into the fuel market which recognises the factors affecting the price of fuel that are outside of retailers’ control. We are pleased that the CMA have acknowledged that retailers did pass on the duty rate cuts to drivers even when wholesale prices were rising. We will continue to engage with the CMA in their formal market study into the fuel market”.
ACS has published a brief explainer document on the elements that make up the price of fuel and recent market trends, which is available here.
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