(Westmorland and Lonsdale) (LD)
(Urgent Question): To ask the Chancellor of the Exchequer if he
will make a statement on road fuel prices.
The Minister for Energy Security and Net Zero ()
From rural hamlets to coastal communities, it is a properly
functioning market that ensures fair prices for motorists, but
for that market to function customers need transparent data to
find the best price. On that basis, when we saw fuel prices
rising last summer we asked the Competition and Markets Authority
to investigate whether the market was working for customers as it
should. Today, the CMA published its final market study report
and I am shocked by its findings: rising fuel retail margins, and
clear evidence of a rocket upwards and a feather downwards in the
pricing pattern for diesel.
It is completely unacceptable that consumers have been paying
more. The financial impact of the 6p per litre increase, just in
the fuel margin, from 2019 to 2022, cost customers of the four
supermarket fuel retailers £900 million last year alone. Asda’s
fuel margin target was three times higher for this year than in
2019 and Morrisons doubled over the same period. It is wrong that
in a cost of living crisis drivers do not get a fair deal on fuel
and end up being overcharged.
Motorists should not be used as cash cows by the fuel industry.
The Government will not stand for it and I know this House will
not stand for it. Therefore, we accept the CMA’s recommendations
in full. We will create a statutory open data scheme for retail
fuel prices and an ongoing road fuel prices monitoring function
for the UK market. We will consult on the design of the open data
scheme and monitoring function as soon as possible this autumn,
but that is not enough. I have asked the CMA to have a voluntary
scheme up and running by next month and I fully expect fuel
retailers to share accurate, up-to-date road fuel prices. The CMA
will also continue to monitor fuel prices.
I demand that fuel retail bosses stop ripping off consumers, by
making prices available so that the market can operate as it
should. Transparency is vital for competition and to keep prices
down.
I am extremely grateful to the Minister for Energy Security and
Net Zero and am delighted to see him, but I am disappointed not
to see the Chancellor of the Exchequer. I would have thought that
this was something that he cared about.
The problem is that the Government have stood for this over the
past year. This morning, right under the Government’s nose,
greedy petrol retailers imposed an additional cost of more than
£900 million on people filling up their cars. Retailers swiftly
passed on price increases in the wholesale market to drivers, and
the prices rocketed. Yet when the wholesale prices dropped,
prices were lowered only very slowly. I think we could all see
that for ourselves. The RAC called this
“nothing short of astounding in a cost-of-living crisis”,
which confirmed that
“supermarkets haven’t been treating drivers fairly at the pumps”.
This affects not just the cost of driving. Higher road fuel
prices have a knock-on effect on inflation across the economy,
pushing up prices in every sector of our country.
The CMA makes it clear that rural areas still face the highest
prices. Where supermarket pumps are fewer and further between,
such as in Cumbria and Somerset, fuel retailers are likely to
have costs that are higher still. The CMA found that fuel prices
in rural places, such as my own in Westmorland and Lonsdale and
in Somerton and Frome, are on average 1.2p per litre higher than
those in urban areas. Of course, in rural communities with poor
public transport links, people have no choice but to drive and
the distances to travel are so much greater, affecting, in
particular, people who work in the care sector. Once again, rural
communities feel taken for granted by this Government.
One solution should be to expand the 5p per litre fuel duty
relief scheme to those many isolated parts of Cumbria that are
not currently covered by it, so that families in Cumbria are not
left at the mercy of the most expensive fuel prices.
Why did the Government fail to stop greedy retailers hitting
families with an almost £1 billion excess fuel bill in the first
place? Will the Chancellor and the Prime Minister summon those
company bosses to Downing Street and press them to return those
unfair profits by lowering their prices? Will the Government
expand the rural fuel duty relief scheme to more areas, to
support communities such as mine that are struggling with the
highest petrol prices?
I thank the hon. Gentleman for his question. He and the RAC are
right to highlight the particular issue in rural communities such
as those that he and, indeed, I represent, and the particular
pressures on consumers there. He will understand that rural fuel
duty relief is a matter for the Chancellor and that what we need
is a properly functioning market. That is why we are implementing
the findings of the CMA in full and putting in place an interim
regime, starting next month.
Mr Speaker
I call the Chair of the Transport Committee.
(Milton Keynes South)
(Con)
Towards the end of last year, the local radio station in Milton
Keynes, MKFM, published research showing that, although there was
considerable competition in Milton Keynes, petrol and diesel
prices were substantially higher across the board than those in
equivalent urban areas. I very much welcome the proposal for a
real-time fuel price comparator, but will my right hon. Friend
assure me that the Government will keep an eye on price
differentials between different urban areas and intervene if
necessary?
As ever, my hon. Friend champions his constituency in this House.
I completely agree. That is why the monitoring function is so
important in tandem with transparency. We have to make sure that
people can see the prices. We know that consumers are prepared to
travel but, if they do not know that there is a cheaper price
available 2 or 3 miles down the road, they will not access it.
That is something that we aim to put right.
Mr Speaker
I call the shadow Minister.
(Bristol East) (Lab)
People across Britain are facing the highest mortgage costs in
Europe, the highest inflation among advanced economies, and the
highest tax burden in 70 years. They are paying the price for 13
years of Conservative failure.
In that context, it is more important than ever for the
Competition and Markets Authority to do all it can to help to
bring down prices. Effective competition in the interests of
consumers must be at the heart of our economy. That is why we
firmly support the CMA’s proposals to help to bring down the cost
of fuel.
‘Filling up the tank at supermarkets is an essential part of
everyday life for families and small businesses across the
country, so the fact that the average annual supermarket margins
on fuel increased by 6p per litre between 2019 and 2022 is deeply
worrying.
I am pleased to see that the Secretary of State has accepted the
recommendations from the CMA to stop retailers artificially
inflating petrol prices during a cost of living crisis; as he
says, transparency is very important. However, given that the
then Business Secretary wrote to fuel retailers and the CMA more
than a year ago to highlight apparent unfairness in fuel prices,
why has it taken so long for the Government to take action on
this issue? Motorists did not need a report to tell them that
they were being fleeced by fuel retailers; they see it every time
they fill up at the pump. Why did the Government need to wait for
the CMA to tell them what everyone else knew before they took
action?
In Northern Ireland, the Consumer Council published a fuel price
checker in September 2020, which has helped to keep fuel costs
below those in England. Why have the Government taken almost
three years to agree to do the same in England? Once again it is
too little, too late from a Government, who have again sat on
their hands. I note what the Minister said about an interim
voluntary scheme and about consulting as soon as possible, but
can he give a clear indication of when the Government will
introduce the change in the law that is needed to make this
permanent?
The hon. Lady is right to highlight the cost of living crisis and
the level of taxes. That, of course, is why her party getting
into power would be such a disaster for ordinary consumers and
motorists throughout the country. We have come through the
pandemic and made sure we have kept the country afloat; for
instance, the Government supported paying nearly half of
everyone’s energy bills through the last winter. A Labour
Government would be a threat to markets such as this, which we
need to function properly, not in the way they would under
Labour.
As for why this has taken so long, the hon. Lady ought to know,
having seen the disaster of her £28 billion energy borrowing
package, which dematerialised: it was a great announcement, but
it did not survive contact with reality.
Mr Speaker
Order. I think we need to help the Minister. The subject of the
urgent question is road fuel prices and I think we should stick
to that. I call the Chair of the Treasury Committee.
(West Worcestershire)
(Con)
When the Chancellor announced that he was cutting fuel duty by 5p
a litre, which cost the Exchequer billions of pounds, little did
he expect that, as outlined so persuasively today by the CMA, it
would feed through immediately into the profits of fuel
retailers—although cynical British motorists may not be
surprised, because they observed it themselves on a day-to-day
basis. I welcome the steps that the Minister has announced, and
urge him to act with greater speed in implementing them, but is
he as surprised as I am that he has been asked this urgent
question by the Liberal Democrats, who voted at their conference
to hike fuel duty sharply?
I would like to say I was shocked or surprised, but I am not
because—as everyone in the House knows, except the tiny number
who sit on the Liberal Democrat Bench—hypocrisy is their main
method of behaviour. The initial Government cut in fuel duty of
5p per litre represented savings for consumers worth about £2.4
billion. We on the Conservative Benches are on the side of the
motorist. We are going to make sure that the market works and
motorists are properly served by it.
Mr Speaker
I call the Scottish National party spokesperson.
(Kilmarnock and Loudoun)
(SNP)
The Minister says he will not stand for motorists’ being ripped
off, but that is exactly what Ministers have done. The Government
have been complacent the whole time, following the 5p fuel duty
cut.
Why has it taken the CMA so long to establish that motorists are
being gouged by 6p per litre compared with 2019? It reported that
diesel prices are an astonishing 13p per litre higher this year
alone than they should have been. That is symptomatic of the
“cost of greed” crisis. Asda received a fine for not complying
with the CMA investigation. That shows an astonishing level of
arrogance on the part of supermarkets that are ripping off their
own customers. It is estimated that we are paying nearly £l
billion a year in additional fuel costs due to the lack of
competition. How does imposing an initial fine of £30,000 on Asda
work as a deterrent when it is making so much money?
I am all for an open data fuel finder scheme, but really, is that
it? I already use an app to shop around for cheaper fuel prices,
so this open data will not necessarily bring competition in all
areas of the UK, and reliance on an app obviously will not help
those who are digitally excluded. What are the Government’s
actual plans to ensure competition and reduced fuel prices,
especially at motorway service stations, which are between 20p to
30p per litre more expensive? When will we see these fuel prices
come down?
That is the closest I have ever seen the hon. Gentleman come to
welcoming a Government response, so I shall take that with me. I
do not mean to try your patience any more than I already do, Mr
Speaker, but, as I said to the hon. Member for Bristol East
(), whether it is major energy
packages or shipbuilding, we find that doing the work first leads
to better long-term outcomes.
(Wokingham) (Con)
Given corporation tax, carbon taxes, the windfall tax, fuel
duties and VAT, is not the bulk of the price at the pump, and of
other fuels, now tax-based? Will my right hon. Friend remind us
of how much is tax and urge the Chancellor to reduce some of
those taxes to cut the cost of living?
I thank my right hon. Friend for championing the consumer, as he
always does. As he will be well aware, tax is a matter for the
Chancellor, but the whole House will have heard his passionate
call to make sure that taxes are held down to the lowest amount
they possibly can be. That is one more reason why we cannot have
the Labour party taking control of the country.
(Slough) (Lab)
In March, the RAC revealed that retailers are making a three
times bigger margin on diesel than they were at the beginning of
last year, and motorists are seeing absolutely no benefit from
the Chancellor’s fuel duty cut. Given the Government’s dither and
delay on taking any sort of action, how does the Minister feel
when the Government’s flagship policy to help motorists is having
little to no impact?
We are furious that these price cuts have not been passed on to
consumers. That is why we asked the CMA to investigate and to get
further into the detail, and it is why we will implement its
findings in full.
(Newbury) (Con)
As my right hon. Friend is aware, I have been campaigning on the
issue of fuel prices in west Berkshire for about a year and a
half. One thing that has been particularly disappointing is the
fact that fuel prices in every single neighbouring constituency
are 5% to 8% lower. I wrote to the CMA and I am pretty
disappointed to read its response today, which tells us a lot.
I welcome the introduction of a real-time fuel price comparator,
but such a tool already exists, albeit in a slightly clunky form.
I draw the Minister’s attention to the fact that it is not enough
just to tell people what the prices are at different pumps in
their local area. It must be transparent to consumers whether
they are in a general area that has higher or lower prices, so
that their MP can make representations on what the supermarkets
may be doing in that area and the CMA can intervene properly.
My hon. Friend has been assiduous and, as she has shown with her
question, focused and detailed in trying to rectify a problem
that the CMA has fully displayed today. It is an unusual way
round, but I would be happy to meet her to discuss the matter
further to make sure we put in place all the right elements, so
that this transparency genuinely gets through to the consumer.
(East Antrim) (DUP)
There is no doubt that fuel costs are driving up inflation,
especially in rural areas. I think the fuel price checker has had
a dampening effect in Northern Ireland because the supermarkets
are always aware that that they are being looked on. However,
does the Minister accept that his Government also have a
responsibility? Net zero policies, with all their associated
taxes—whether it is the emissions trading scheme, green levies or
fuel duties—drive up prices, too. The Government have a role to
play in reducing inflation as well as in transparency on
supermarket prices.
The right hon. Gentleman is drawing the wrong conclusion from the
sky-high prices of the past year or two. It is sky-high
international fossil fuel prices that caused the enormous
squeeze. The faster we can move to cleaner and cheaper sources of
energy, the sooner we can ensure that our constituents save money
and contribute to dealing with what is an ever more serious
threat.
(Wyre Forest) (Con)
Having brought a ten-minute rule motion on this subject some
eight years ago, I am delighted that patience has finally paid
off. One issue I was raising at that time was the inequality
between the prices in towns and those on motorways, which the
Scottish National party spokesman has mentioned. Is my right hon.
Friend confident that the measures being brought in today will
reduce those 15p or 20p premiums on road fuel prices at motorway
service stations compared with normal areas?
As so often, my hon. Friend has been ahead of me. The issue he
raises is part of the picture; like him, I have observed that the
captive market along motorways is subject to higher prices than
elsewhere. I hope that can be part of our consideration to make
sure we have a system that works at its best for everybody.
(Easington) (Lab)
May I respectfully point out to the Minister that this is not a
town versus country or urban versus rural issue? The RAC has
identified that some retailers are grossly profiteering, taking a
three times bigger margin than they were at the beginning of last
year, particularly on diesel sales. For the avoidance of doubt,
will he confirm that the Government scheme he has outlined today
will apply to all fuel retailers, not just those at supermarkets?
I will write to the hon. Gentleman with the precise details of
everybody who will be included. He is right to highlight that
this is not just an issue in urban areas. However, in those areas
there tends to be more competition and easier transparency than
there can be in rural and coastal areas.
(South West Bedfordshire)
(Con)
A couple of weeks ago, I drew the House’s attention to the fact
that the same supermarket tanker would unload fuel at 10p a litre
cheaper in one place than it would if it came 10 to 15 miles up
the road to my constituency. If today’s report does not fix that,
it will not have been good enough and the Government will have
more work to do. I hope that my right hon. Friend will give me
some reassurance on that point.
We have to make sure the market works. Transparency is our
biggest single weapon, and we need to be doing this in a way that
reaches people, be they digitally enabled or not; we are
wrestling with those details. Let us look at the alternative to a
market-based system—other countries have tried it, as it is a
populist measure. It does not work, it leads to a shortage of
supply and it ends up creating the very dominance that we seek to
ensure is not exploited in systems such as we have seen in this
CMA report.
(Chesterfield) (Lab)
The hon. Member for South West Bedfordshire () asked a good and apposite
question. In February, I wrote to all the major supermarkets that
have outlets in Chesterfield asking them why they were retailing
petrol for 10p more a litre there than they were selling it for
just 10 miles up the road in Sheffield. They were very
transparent and honest about this, saying, “ It’s a market where
we think we can make more money out of Chesterfield residents
than we do out of Sheffield residents. That’s why we charge you
more.” That is despite the fact that there is no additional cost
to getting the fuel there. Although I welcome the greater
transparency, making it easier for consumers, what they will see
in Chesterfield is that they are paying more than they would up
the road in Sheffield. Is there anything in what the Minister is
announcing today that will empower people in Chesterfield to
bring their prices down?
Transparency.
(West Dorset) (Con)
The good people of Bridport and Dorchester in West Dorset have
had to pay up to 20p a litre more than those in towns not far
away. The Liberal Democrats have been silent about that
throughout the entire duration, so it is somewhat hypocritical of
them to bring this matter to the House today, particularly given
that they voted to increase the price per litre. Although I
welcome what the CMA has had to say in its report today, it does
not really deal with the issue we are seeing of rigorous yield
management by supermarkets with their petrol prices. That is not
a matter of competition; that is where they believe they can get
more money out of a particular group people or community. I would
be very pleased if the Minister would meet me to look at how we
can take this forward and grasp that issue.
I would be delighted to do so.
(Inverclyde) (SNP)
Now that we know that competition on fuel prices has weakened in
recent years and that that has led to inflated prices,
particularly in my constituency where, despite a campaign for
fair prices led by MSP, we have been paying
over the odds for years, may I seek a guarantee that supermarket
food prices are not following the same pattern?
Following this report, the CMA has decided to look into the
supermarkets and will report back as soon as next month.
(North East Bedfordshire)
(Con)
I thank the CMA for its report and the Government for accepting
the recommendations, although I think we are putting too much
faith in price transparency to solve the market problem. I was
interested to see in the trend profit margins for supermarket
retailers and non-supermarket retailers that supermarkets are
consistently increasing their margins while non-supermarket
retailers are not. Will the Minister follow up with retailers, in
the light of this report, to make sure that we check that the
margins come down next year and in the following year?
I thank my hon. Friend for his typically penetrating question. As
I said, one of the recommendations is to maintain a monitoring
function, which will help to give us the market intelligence so
that if further intervention is required, we will have the data
on which to base it.
(Dwyfor Meirionnydd)
(PC)
Patchy public transport contributes to high costs for rural
households, as many people have no choice but to use their cars
for essential journeys. Despite this, the rural fuel duty relief
scheme does not apply to a single area in Wales. Will the
Minister commit to pressing the Treasury to reconsider the scheme
to take into account access to local public transport networks,
as well as providing a guarantee of inclusion for Welsh areas?
I thank the right hon. Lady for her question and will ensure that
His Majesty’s Treasury is aware of it.
(Scunthorpe) (Con)
The good people of Scunthorpe spotted this issue some time ago,
so I thank my right hon. Friend for his work on it and the
measures he is recommending. Has the similar open-data scheme
that has been trialled in Germany resulted in a boost in
competitiveness? If so, when does my right hon. Friend think we
will start to see the results at the pumps here?
I hope from as soon as next month, under a voluntary scheme. My
hon. Friend gives me the perfect opportunity to repeat how
determined I am to see the companies provide the data so that we
have something far less clunky, as it has been called, and far
more comprehensive than what we have today, and so that that can
lead to the benefits that have been found elsewhere.
(Angus) (SNP)
I am not certain that the seriousness of the situation that faces
rural constituencies is being taken appropriately into account.
My Angus constituents live in towns and landward areas that are
miles away from supermarket fuels. They pay the highest prices
for fuel, they have no public transport to speak of so have to
use their cars and vehicles, they pay the highest delivery prices
and they are often on the lowest wages. If the Minister thinks
that greater transparency over fuel prices is going to help, he
is stretching the point. My constituents in Angus know how
expensive their fuel is and they know how far they have to travel
to get cheaper fuel. This announcement will not fix the
situation. We need the Treasury to get its act together and
intervene in what is essentially critical national
infrastructure, which is what road fuel is.
I will take that as a further representation to His Majesty’s
Treasury.
(Kettering) (Con)
Motorists in and around Kettering have long suspected that petrol
and diesel forecourt retailers have been inflating prices well
above where they should be. Prices go up far too quickly and come
down far too slowly. Given the fact that the petrol and diesel
forecourt retailers effectively ignored the letter from the
Business Secretary in May 2022, will the Minister assure my
constituents that the Competition and Markets Authority will
continue to monitor the market closely to ensure that does not
happen again?
My hon. Friend is quite right. Urging them to behave properly is
not enough, which is why we will not only put in place a
mandatory system to ensure that the data is there but ensure
ongoing monitoring so that, as I said to our hon. Friend the
Member for North East Bedfordshire (), we have the data on which
to base further intervention should that be required.
(Strangford) (DUP)
This is a very welcome announcement, especially in respect of the
information on fuel-price competition that will allow drivers to
look for fuel at petrol stations that are closer and have better
prices, thereby enabling them to save money. On any potential
fuel fund offers, there is an older generation—I am probably one
of them—who perhaps do not use apps and therefore do not
understand how they work; what steps will the Minister take to
ensure that they have access to information on fuel funding that
is accessible for them and easily understood so that they, too,
can take advantage of what is on offer?
I thank the hon. Gentleman for his question. I would not want to
finish without mentioning that, as of Monday 26 June, unleaded
petrol is 143.43p per litre, and that has reduced, on average, by
47.5p from June last year, and diesel is 145.6p per litre, and
that has reduced by 53.3p per litre on the previous year. I will
write to the hon. Gentleman to make sure that I can properly
inform him in answer to his question.
(Burnley) (Con)
This report clearly shows that residents in Burnley and Padiham
and our villages have been overcharged for their fuel for too
long. Does my right hon. Friend think that the Competition and
Markets Authority now needs to relook at the ownership changes at
Asda?
As the Minister for Energy Security and Net Zero, that perhaps
stretches slightly beyond my brief, but, as those on Treasury
Bench will have heard my hon. Friend’s question, I am sure that
he will be able follow up with others who have direct
responsibility.
