The sector is already under surveillance by the competition watchdog.
After accusations that they are not passing on declining wholesale costs to drivers, pressure is growing on petrol station owners to reduce fuel prices.
According to the RAC, the average price of petrol in Britain fell 8p per litre to 151p in December and diesel by 9p a litre to 174p.
The motoring group claimed that retailers, including large supermarkets, did not cut prices fast enough or in a significant way to offset the declines in wholesale costs.
The UK’s fuel prices are under investigation. Last summer, record-breaking fuel prices led the competition watchdog to begin examining this sector.
RAC Fuel Watch data revealed that filling a 55-litre petrol tank cost an average of £83.08 at the end of December. This was £4.63 less than at the beginning of December. Diesel was £95.68 cheaper and £5.19 less.
The RAC argues however that petrol should not be sold at 151p per litre but at 140p and diesel at 160p respectively, rather than 174p.
Concerns about the potential impact of a global recession and the economic consequences of Covid in China have led to oil prices falling in recent months.
After accusations that consumers had not been informed of a reduction in fuel duty, the UK government asked the Competition and Markets Authority to review fuel prices.
Initial concerns were raised by the CMA about the margins of oil refineries. then stated that evidence was present of “rocket-and-feather” behaviour – where prices rise rapidly and fall slowly – within the industry. The investigation continues.
Late December saw Grant Shapps, the business secretary, write to fuel retailers asking them to explain pricing changes to the CMA. He expressed concern about consumer spending pressures. He stated that the government would not hesitate to take action to ensure healthy competition and fair fuel prices for consumers.
Simon Williams, a spokesperson for RAC, stated that the RAC has been calling on the four major supermarkets to reduce their prices substantially. This is to ensure drivers get a fair deal when filling up. Even though they have collectively reduced their prices by more than 10p per litre in December they are still not where they should be, given the magnitude of the drop in wholesale price.
“We hope that the intervention of the business secretary just before Christmas will increase pressure on larger retailers to do right by us.”
According to RAC data, diesel and petrol prices in the UK were highest in London and the southeast of England in December.
