Road Fuel
Prices
Commons Urgent Question
The following Answer to an Urgent Question was given in the House
of Commons on Monday 3 July.
“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.”
4.39pm
(Lab)
My Lords, cost of living pressures are affecting people right
across Britain. In that context, we welcome the Government
commissioning the Competition and Markets Authority to
investigate soaring fuel prices last July. The CMA has finally
recommended measures to improve fuel price transparency and stop
inflated fuel prices being passed on to hard-hit consumers. The
fuel finder open data scheme is welcome, but given that retailers
have been inflating the prices, how do the Government expect the
CMA’s voluntary scheme to work? When will the Government end the
painful wait for consumers and bring forward the legislation that
is needed to enforce it?
(LD)
My Lords, the Government have stood for this gouging behaviour by
the supermarkets over the past year. In rural areas such as
Somerton and Frome, and Mid Bedfordshire, people find themselves
facing the highest prices and the least competition, and will
benefit the least from the comparison scheme. I have two
questions for the Minister. Is it fair that supermarket bosses
will get bonuses based on gouged profits, and will the Minister
review the rural fuel duty relief scheme, which gives a
5p-per-litre reduction, to see whether it can be extended to
rural areas not presently covered?
The Parliamentary Under-Secretary of State, Department for Energy
Security and Net Zero () (Con)
My Lords, let me thank both noble Baronesses for their support
for the report and the Government’s action. First, in response to
the noble Baroness, Lady Blake, putting the open data scheme and
monitoring function on a statutory footing will require
parliamentary time, but the Government will work as quickly as
possible to do so. I note that she welcomed the fact that in the
meantime we have asked the CMA to create an interim voluntary
scheme encouraging fuel retailers to share accurate, up-to-date
prices. Of course, we expect all fuel retailers to co-operate
with the CMA by providing that information fully and promptly. We
will legislate as soon as parliamentary time allows, but we need
the primary legislation to be passed by both Houses first. We
will consult on the secondary legislation in advance of primary
legislation being approved in the digital services Bill. The
noble Baroness will know that taxation and fuel duty are matters
for the Treasury and the Chancellor, and I would not want to
predict what he might do on that.
(Lab)
My Lords, I want to follow up on a question asked in the other
place yesterday. It follows a visit I made recently to Northern
Ireland, where I was struck by how much lower fuel prices were. I
understand that is largely because of the fuel price checker. The
Minister in the other place was asked yesterday why the
Government had taken so long to introduce something similar in
the rest of the UK; can the Minister here today answer that
point?
(Con)
As I just said to the noble Baroness, Lady Blake, we will
legislate as soon as we can. We will consult on the secondary
regulations in the autumn, but we cannot implement them until we
have the primary legislation through. There are of course a
number of existing fuel price checkers, but the problem is that
they are not updated frequently enough and are not compulsory, so
not all retailers have to take part in them. When we have the
powers, there will be a compulsory scheme and all retailers will
be expected to comply.
(Con)
Does my noble friend agree that the excessive prices that have
been charged have had a disproportionate impact on rural
motorists and have added to the cost of deliveries of foodstuffs
and other items? Is that something that the Government will keep
a watchful eye on?
(Con)
My noble friend makes a good point. For many rural areas, where
filling stations perhaps do not get the throughput of customers,
prices tend to be higher anyway. It is certainly something we
want to keep an eye on to make sure that rural customers are not
disadvantaged.
(CB)
My Lords, the supermarket premium is apparently about 6p per
litre, but that is nothing compared to the prices charged in
motorway service stations, where it is often a further 18p to 20p
above that. The noble Baroness, Lady Kramer, referred to the 6p
as gouging. If that is gouging, what is the situation with
motorway service stations and what are the Government going to do
to fix it?
(Con)
The noble Lord makes a very good point. Those of us who use
motorway service stations are often baffled as to why fuel is so
expensive in them. This is something that we will want to keep a
close eye on; again, price transparency—that is, motorists having
the ability to check what fuel might be available just by taking
an exit and going to a service station that is relatively close
to a motorway—would be much more beneficial.
(Lab Co-op)
My Lords, Ministers, particularly the Prime Minister, do not seem
to understand the problems of ordinary people. As far as fuel is
concerned, whenever fuel costs go up for industry, prices go
shooting up. When fuel costs go down, prices are very slow to
come down. Now, we have the banks putting up interest rates for
borrowers but not offering high-interest returns for savers.
There are so many examples of where ordinary people are
suffering. The regulators seem to do nothing about it; they seem
more interested in the interests of the industries than in those
of consumers. Is it not about time that we had some kind of
directive for the regulators to look after consumers’
interests?
(Con)
I understand the point that the noble Lord makes, but I think
that he is being a little unfair. The CMA is a regulator, of
course; this particular regulator very much had the interests of
the consumer at its heart when it produced this report, which has
widespread support and backing from all parts of the House. The
Government will act on its recommendations, so that is a case of
a regulator acting in consumers’ interests. The CMA is designed
to produce competition, which is the best thing that can operate
for the consumer.
The other example mentioned by the noble Lord is slightly off
topic, but much more attractive interest rates are offered by a
number of smaller financial institutions. It really is a question
of the consumer shopping around, but plenty of information and
online resources are available for someone to find the best
return on their money. No doubt the noble Lord has lots that he
wants to invest; if he looks at the various websites, he will be
able to invest it well. Obviously, he is a well-known Scottish
Member so is bound to have plenty of funds to invest.
(LD)
My Lords, picking up the point made by the noble Lord, Lord Vaux,
about motorway services, a number of continental countries have
signs along the motorway telling drivers what the price of petrol
will be at the first, second, third and fourth service stations
along their route. That provides a competitive element and is
supposed to have been very successful in managing prices. Are the
UK Government looking at such a scheme?
(Con)
The noble Baroness makes a good suggestion. I am not aware of
that being contemplated or what powers we would need to implement
it, but I will certainly ask officials to have a look at it.
