Fuel prices: Cost to fill average family car to hit £100
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Business Secretary Kwasi Kwarteng has asked the Competitions and Markets Authority (CMA) to conduct an “urgent” investigation amid concerns that the 5p cut in fuel duty has not been passed on to customers at the pump.
The Government is alarmed by “wild fluctuations” in the prices at petrol stations only a short distance apart.
The average cost of filling up a car hit £100 last week. On Saturday, petrol cost on average 183.16p per litre and diesel 188.82p per litre.
A Whitehall source said: “We’re trying to keep as much of people’s hard-earned money in their back pocket as possible, but it’s frustrating that our £5billion fuel tax cut doesn’t seem to have been passed on everywhere – with prices always quick to go up but slow to come down. No one understands why the price for their fuel can be as much at 10p a litre dearer at the forecourt a village over, so we want drivers to be completely certain that the fuel retailers aren’t profiteering at their expense.”
The CMA will investigate the health of competition in the market and the Government is pushing for greater transparency about prices. An initial report is expected early next month.
Steve Gooding, director of the RAC Foundation, warned that drivers and businesses were “being stretched to financial breaking point”.
He said it was “high time for the CMA to shed some light on an industry whose finances are, to most of us, about as transparent as a barrel of crude”.
Mr Gooding pressed for the Government to do more to push down prices, adding that “almost half of what we fork out on the forecourt goes straight into the Chancellor’s coffers.”
Former Conservative minister Robert Halfon is in no doubt that motorists are being “ripped off,” saying: “These prices are crushing people up and down the country.They are crushing families who can’t even afford to take their kids to school; they are crushing van drivers who can’t afford to earn a living, they are crushing haulier companies; they are crushing NHS workers who can’t afford to go to work.”
Mr Halfon said high fuel prices were pushing up costs the NHS and the police and wants to see cuts to fuel duty or VAT.
Saqib Bhatti, the Conservative MP for Meriden said: “Many of my constituents have no choice but to drive and the government is doing everything it can to help motorists deal with high fuel prices, including the fuel duty cut. It is deeply unjust for retailers to pocket that money instead of passing the benefit onto drivers.”
Howard Cox, the founder of the FairFuelUK campaign, has pushed for a CMA inquiry alongside a 20p per litre cut to fuel duty and the introduction of a fuel prices watchdog, PumpWatch.
He said: “I honestly think petrol could hit 190-195p and diesel could hit something 210p within the month.”
Mr Cox claimed retailers were being “ripped off” higher up the fuel supply chain, saying: “I know several garages that are going to go bust at the moment because they are making a loss on petrol and diesel.”
Warning of the impact on everyday life, he said: “It’s crippling. We’re seeing care workers can’t get to work and they can’t see their clients.”
“I’m hearing some people who have to have chemotherapy can’t even get to hospital appointments because they can’t afford to fill up their tanks to get there. Hauliers are suffering beyond belief; I think there are a lot of businesses that are totally unviable.”
Mr Cox called on Britain to follow the example of the German Government which in March cut the tax on fuel by 30 euro cents for petrol and 14 cents for diesel.
The Government argues that the 5p fuel duty cut is the “biggest ever cut to fuel duty rates” and should result in an average saving of £100 for a one-car family.
In his letter to the CMA, Business Secretary Mr Kwarteng describes the scale of public anxiety, saying: “[There] remains widespread concern about the pace of the increase in prices at the forecourt and that prices may not fall as much or as fast as they rise. The British people are rightly frustrated that the £5billion 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.”
Ben Everitt, a Conservative member of the levelling up committee, said: “The war in Ukraine has obviously had a huge impact on pump prices, but we need to make sure that companies aren’t taking advantage of that and ripping customers off. Rural communities rely on cars for work, commutes, the school run and everyday life. “
“At nearly two quid a litre, many folk are worried it’s becoming impossible to run a car. We need to make sure consumers are protected.”
The move to investigate the fuel industry comes as evidence grows of strong public concern about the economy and the risk of recession.
Polling by Ipsos found 51 percent of women and 40 percent of men “are finding it harder to stay positive about the future”. Nearly eight out of 10 (79 percent) respondents are concerned about the economy going into recession.
Research director Keiran Pedley said: “Given the cost-of-living crisis, the war in Ukraine and a new virus in the news, it comes as no surprise that many Britons are finding it harder to stay positive, both day-to-day and for the future.”
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