Following this morning’s report that the Government is
considering greater transparency of pump prices and a pricing
policy for road fuel, the AA responds:
“The AA very much welcomes the Government’s move to introduce
greater fuel price transparency and stimulate the level of
competition lost since the pandemic,” says Edmund King, the AA’s
president.
“Since 2012, when the AA sent a fact-finding mission to view fuel
price transparency in Austria, the UK’s biggest motoring
organisation has said that this is the best way to stimulate
competition at the pump. The Austrian system has evolved in other
European countries and, since July 2020, a version has been
available in Northern Ireland.
“The success and demand for fuel price transparency in Northern
Ireland was illustrated last year with a more than 500% increase
in views of the Price Checker website and app. During Christmas,
petrol was 10p a litre and diesel 13p a litre cheaper there than
in southern England.
“The Government is now considering real-time monitoring of pump
prices that would make the Northern Ireland model even more
sophisticated and comprehensive, particularly with coverage of
prices along routes connecting towns and cities. This is
extremely good news and mirrors the ‘crème de la crème’ fuel
price transparency in France (https://www.prix-carburants.gouv.fr/).
“However, the AA would be happy with a two-stage approach where
the current Northern Ireland model is extended across the UK to
stimulate pump-price competition as soon as possible. The more
sophisticated real-time platform would follow later, as we
suspect it will meet resistance from the fuel trade.”
King adds: “The AA also welcomes greater scrutiny of the
relationship between wholesale price movements and those at the
pump, assuming that that will require a regulator.
“However, the AA is wary of a pricing policy for fuel that may
reduce the competitive incentive. A benchmark may increase price
consistency but reduce the appetite for price cuts. We can also
see difficulties for small rural fuel stations where low sales
volumes could leave remaining stock valued higher than a falling
benchmark.
“For that reason, fuel price transparency to stimulate
competition has to be the first priority. And, if that doesn’t
work, a more draconian pricing policy could follow.”
