Motorists are being put in the driving seat to find the best fuel prices after a watchdog found many were being overcharged at the pumps.
A new fuel price reporting scheme will allow consumers to compare prices in real time in any area of the UK, as the Government changes the law, forcing retailers to comply by providing up-to-date price information.
This is expected to lead to greater transparency and competition, in turn driving down prices and easing the cost of living.
Over-charging by 6p a litre
The tough action follows publication of a Competitions and Markets Authority (CMA) report that showed some supermarkets charged drivers 6p more per litre for fuel. This amounts to £900m in extra costs in 2022 alone.
The report found a concerning weakening of competition in the fuel market and an overall increase in retailers’ margins, especially in respect of diesel. Supermarkets were reportedly the worst offenders.
New powers will be handed to a public organisation yet to be decided, to monitor the UK road fuel market, scrutinise prices and alert government if further intervention is needed.
Grant Shapps, Energy Security Secretary, said: “Some fuel retailers have been using motorists as cash cows – they jacked up their prices when fuel costs rocketed but failed to pass on savings now costs have fallen.
“It cannot be right that at a time when families are struggling with rising living costs, retailers are prioritising their bottom line, putting upwards pressure on inflation and pocketing hundreds of millions of pounds at the expense of hardworking people.”
Similar schemes in Germany and Australia
The move follows a similar scheme in Germany, which boosted competition among fuel retailers. Meanwhile, motorists who shopped around in Queensland, Australia, saved on average $93 per year off the back of a statewide scheme rolled out in the area.
The Government will consult on the design of the open data scheme, and market monitoring function this autumn with changes to the law needed to bring it in.
In the interim, the CMA will create a voluntary scheme encouraging fuel retailers to share accurate, up-to-date road fuel prices for publication by August and continue to monitor fuel prices using its existing powers.