Overcharging crackdown leads to significant drop in diesel prices

An upcoming review by the Competition and Markets Authority (CMA) is set to examine the issue of declining competition in fuel prices. The CMA acknowledges that while the conflict in Ukraine has contributed to the rise in wholesale costs, it believes that the increasing pump prices cannot be solely attributed to external factors beyond the control of retailers.

The CMA further notes that average pump prices at supermarkets in 2022 are approximately 5p per litre higher compared to what they would have been if the average percentage margins remained at 2019 levels. This situation raises concerns for diesel drivers, who already face pressure to meet net zero and local low-emission zone targets, as they might experience even weaker competition in diesel prices.

The RAC reveals that the price difference between Northern Ireland and the rest of the UK is significant, with the average price per litre being 138.49p in Northern Ireland compared to the UK average. This “galling” difference suggests a more transparent and competitive fuel market in Northern Ireland, something that UK drivers would also like to see. Simon Williams from the RAC suggests that retailers with lower prices are still profitable, indicating that UK supermarkets could potentially lower prices even further.

Mr. Williams notes that with a more transparent market, the average diesel price in the UK could be around 137p per litre, similar to what drivers in Northern Ireland are paying. This would be a price that hasn’t been seen in the UK since September 2021. The CMA has expressed dissatisfaction with the evidence provided by supermarkets in its initial study and plans to conduct formal interviews with senior management later this month. A report detailing the findings is expected to be released in July.