Government-backed fuel price scheme hailed for saving drivers as petrol costs hit three year high
Despite average petrol prices reaching a three-and-a-half-year high, the government’s fuel benchmarking scheme has been praised for potentially preventing even higher costs for motorists.
The Government’s Fuel Finder tool is likely to “play a big role” in mitigating the impact on motorists, the AA suggested.
Wholesale gasoline prices in May rose 5 points above the previous peak during the Iranian oil crisis, but this “caused less strain at the pump than feared,” according to the automotive organization.
Last week, the average price of a liter of petrol in the UK was 159.7p; this was a level not seen since November 2022.
The Fuel Finder scheme, which became legally mandatory for fuel retailers in the UK in February, requires them to report price changes.
This data can then be accessed by third-party fuel price apps and websites, improving the accuracy of the information provided to consumers.
Luke Bosdet, the AA’s spokesman on road fuel prices, said: “Motorists in the UK appear to have been spared the worst of the sharp increase in petrol wholesale costs from 17 April to 18 May, long enough for the fuel trade to pass a significant part of the increase onto the pumps.
“This is a different period from the increase in pump prices at the beginning of the Iran war, when higher demand helped price changes move faster.
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“But it is very likely that the increased competition created by Fuel Finder price transparency will play a big role.”
Mr Bosdet added that some motorway service areas, which were charging 184.9p per liter for petrol in late April, reduced their prices to 178.9p last weekend.
Meanwhile, a report by competition watchdog the Competition and Markets Authority (CMA) found there was no evidence that fuel retailers were changing pricing strategies to take advantage of the conflict in the Middle East, but the lack of effective competition “remains a cause for concern”.
It said the difference between the price retailers pay for fuel and the price at which they sell it, known as the fuel margin, remained at “historically high levels”, averaging 11.3p per liter in April.
The watchdog said it would be “concerned” if current high fuel prices “continue” at a time when supply constraints have recently eased.
CMA chief executive Sarah Cardell said: “We know that prices at the pump put real pressure on drivers’ pockets.
“While our analysis shows that the main reason for higher fuel prices is the increase in wholesale prices, we remain concerned that weak competition in the industry is causing drivers to pay more.
“Retailers should be in no doubt that we continue to monitor prices and margins closely and expect any reductions in wholesale prices to be passed on quickly and fully to drivers.
“Meanwhile, Fuel Finder can help drivers save up to £9 per tank. The more drivers use Fuel Finder-powered services, the better it works, saving money now and reducing prices in the long term.”
RAC head of policy Simon Williams said: “Confirmation that retailers have not changed their pricing strategies as a result of the Iran war is positive, but it is worrying that the watchdog has concluded that competition in the road fuel market is still lacking and margins are still at historically high levels.
“The new Fuel Finder, which the government introduced at the beginning of February, is expected to help with this, but it is still early days.”
