Petrol retailers told to pass on fuel duty cut

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The government is concerned that petrol retailers are not passing on the recent cut in fuel duty.

The business secretary told the petrol bosses that the competition regulator was watching the situation.

The petrol retailers said their costs had remained high.

The margins are often not enough to cover operating costs.

The Chancellor implemented a 5p per liter cut in fuel duty in March.

In a letter to the industry, the business secretary said the public was expressing concern about the pace of the increase in prices at the forecourt.

He said people were frustrated that the fuel duty cut didn't seem to have trickled down to forecourt prices.

It is unacceptable that different locations within the same retail chain have different prices.

Mr Kwarteng said his officials recently engaged the Competition and Markets Authority about the issue, as a result of perceived intransigence to date.

I have been reassured that they will not hesitate to use their powers against petrol stations if there is evidence that they are violating competition or consumer law.

Prices have risen again in recent weeks, after dipping after the previous record of 1.79 in March.

The average price of petrol has gone up by over 2p a liter since the beginning of May, according to the RAC.

Retailers are taking an average profit of 2p per liter more than they did before the duty cut.

Gordon Balmer, executive director of the Petrol Retailers Association, which represents independent forecourts, said that comparing pump prices against wholesale prices only gives a partial picture.

Retail margins are often not enough to cover operating costs once additional expenses such as storage and delivery costs are taken into account.

If the government wanted to lower pump prices, it should reduce fuel duty by more than 5p.

He said that 5p per gallon did not represent a substantial enough cut to ease the burden of rising prices on motorists.

While the chancellor was announcing it, oil prices went up. Sales volumes of petrol and diesel are not back to their pre-pandemic levels.

Independent fuel retailers and supermarkets are competing with each other on the smallest of margins.

supermarkets have not passed on the fuel duty cut and falls in wholesale fuel prices.

The top four supermarkets are not doing enough to help customers cut their fuel bills, according to the RAC.

Despite operating just a fifth of petrol stations in the UK, the big supermarkets are responsible for around half of all fuel sales so how they choose to price petrol and diesel has a huge impact on what drivers end up paying.

When wholesale fuel prices fall dramatically it can be frustrating for drivers. It takes one retailer to fire the starting gun and cut its prices in order for others to follow.

We know that the biggest retailers tend to be reluctant to reflect falling wholesale prices at the pumps day-to-day, yet they seem to pass on increases quickly when wholesale prices are rising. This can be bad for drivers.

The RAC believes that supermarkets wait for wholesale prices to fall before cutting their prices. If they cut the retail price too soon, they will be forced to raise the wholesale price again, which will look bad to customers.

The cost of living is a real challenge for many households and we are committed to helping our customers as much as we can.

The day the chancellor announced fuel cuts, we lowered prices so that our customers could benefit as soon as possible.

Morrisons took the full 5p from its prices at 6pm on the day of the announcement.

The companies have not responded to the request for comment.