UK drivers being overcharged as gas costs fail to trace oil market, watchdog finds

[ad_1] Drivers are being overcharged for petrol and diesel, the UK’s shopper watchdog has mentioned, dismissing forecourt operators’ excuse for charging extra on the pump.

Gas retailers have mentioned they're unable to decrease pump costs to maintain tempo with falling international oil markets as a result of they should make up for larger non-fuel “working” prices, similar to wages and vitality.

Nevertheless, an evaluation by the Competitors and Markets Authority (CMA) concluded this was not the case.

The watchdog mentioned that, whereas retailers continued to make robust revenue margins on gas in contrast with previous ranges, knowledge recommended working margins have been additionally elevated.

“Gas margins stay at persistently excessive ranges – and our new evaluation reveals working prices don't clarify this,” mentioned Dan Turnbull, the senior director of markets on the CMA. “This means competitors within the sector is weak – if it was working properly, drivers might see decrease costs on the pump.”

The AA and RAC motorists’ teams mentioned the report confirmed that motorists have been being charged an excessive amount of for gas.

The RAC’s head of coverage, Simon Williams, mentioned the CMA had “clearly rejected” the rationale put ahead by petrol retailers.

The AA mentioned the wholesale value of petrol paid by retailers had “crashed by greater than 7p a litre” for the reason that finish of November, including: “With the VAT on the pump, that needs to be a saving of 8.4p, or £4.60 a tank. As a substitute, the common petrol pump value has fallen simply two-thirds of a penny.”

“That is basic ‘rocket and feather’ pricing on the pumps and the bane of UK drivers,” an AA spokesperson mentioned, a reference to retailers placing up costs rapidly when gas markets rise however carry them down far more slowly when wholesale prices fall.

The CMA mentioned in September that it was “deeply involved” about overcharging by gas retailers however that it had but to carry out an in depth evaluation of how corporations have been being affected by altering working prices.

Monday’s CMA report discovered that gas costs have been falling, from a median of 135p per litre (ppl) for petrol and 142ppl for diesel, each down 8ppl from the earlier yr, due largely to decrease crude oil costs, change charges and refining prices.

However whereas costs have come down between November 2024 and October this yr, the watchdog discovered that they'd not declined by as a lot as they may have, as non-supermarket retailers have clung on to traditionally excessive gas revenue margins.

The CMA will launch a “gas finder” scheme subsequent yr, permitting drivers to check pump costs in actual time, together with by means of navigation apps and value comparability web sites.

Turnbull mentioned: “We all know gas prices are an enormous subject for drivers, particularly at the moment of yr with thousands and thousands making journeys throughout the nation. This is the reason the gas finder scheme is essential – it can put energy again within the arms of motorists and save households cash.”