Government blames petrol retailers

On 17 May, the Secretary of State for Business, Rt Hon Kwasi Kwarteng MP, wrote to petrol retailers around the UK. The government claimed that the 5p cut in fuel duty is not being passed on. Mr Kwateng says in his letter “The British people are rightly expressing concern about the pace of the increase in prices at the forecourt, and rightly frustrated that that the Chancellor’s Fuel Duty cut does not appear to have been passed through to forecourt prices in any visible or meaningful way.”

Petrol prices around the UK continued to rise. In Somerset they are now routinely above £1.75 a litre. Now the Secretary of State has gone further. Today he reiterated the point to the Competition and Markets Authority (CMA). “The British people are rightly frustrated that the £5 billion package does not always appear to have been passed through to forecourt prices and that in some towns, prices remain higher than in similar, nearby towns.”

The CMA is now being instructed to investigate the petrol retailers. He says “I am writing to you to ask that the CMA conduct an urgent review of the fuel market, as well as a longer-term market study under the Enterprise Act 2002, to explore whether the retail fuel market has adversely affected consumer interests.

As long as the review recognises that the price of fuel in rural locations cannot, necessarily be the same as in London. It seems ironic. It is easy to understand the price of fuel is going up. And therefore the cost of travel has gone up. Yet apparently it is harder to understand that the price of delivering fuel (in lorries) from ports to rural locations has gone up. Petrol may be expensive in rural petrol stations but often they are a life blood for small rural communities. One option that the chancellor did not take in the budget, was to offer a greater reduction in fuel duty for rural petrol stations. Which was perhaps a pity.

Where the Secretary of State has a point is in the great disparity in petrol prices around supermarkets in our towns. The larger towns in Somerset are well served with supermarket petrol stations. Yet there is quite often a disparity of up to 10p a litre from the cheapest to the most expensive…..

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