Fuel prices at the pump have fallen twice as fast after a regulator accused retailers of not passing on a fall in wholesale costs to motorists, new analysis has revealed.
Average petrol prices dropped twice as fast following a Competition and Markets Authority (CMA) report accusing retailers of not reflecting a decline in wholesale costs, the AA has said.
It took 31 days for prices to decrease by 3.5p per litre from 8 October.
In just 14 days after the CMA issued its report on 9 November, prices reduced by 3.75p.
The regulator warned that in September and October, the differences between pump prices and wholesale costs of fuel were “significantly above the long-term average”, and a continuation of that trend would “cause concern” about a lack of competition.
Luke Bosdet, AA pump price spokesperson said: “It’s amazing what happens when the competition watchdog gives the fuel trade a good prod – pump prices fall at twice the speed and £2 comes off the cost of a tank of petrol within a fortnight.”
Legislation to give the CMA new powers – expected to come into force next year – to act as the UK’s fuel price watchdog is going through Parliament.
The regulator will have more ability to gather information to provide regular public updates on the state of competition in the UK fuel market, and will report evidence of unjustified price increases.
Many fuel retailers – including all four fuel-selling supermarkets – have signed up to a CMA scheme to share daily price data.
The Government intends to make this a mandatory programme.
Mr Bosdet said: “We will have to see how MPs giving the CMA a stronger role in scrutinising the fuel trade turns out in practice. However, evidence this month is extremely positive.
“Drivers just need the voluntary fuel price reporting scheme to become a statutory one, particularly along motorways and major routes.”
Simon Williams, RAC fuel spokesman, said: “The recent fall in fuel prices is definitely no cause for celebration as drivers are still losing out massively at the pumps because retailers refuse to cut their prices to reflect far lower wholesale costs.
“Average retailer margin on petrol is currently around 17p a litre – 10p more than the long-term margin.”