The UK's Competition and Markets Authority (CMA) launched on Friday an in-depth market study of the domestic road fuel market after finding "cause for concern" in a rising gap between crude oil prices and wholesale fuel prices.
The authority was asked last month by UK Business and Energy Secretary Kwasi Kwarteng to carry out an urgent review of the retail fuel market to see whether retailers have passed on the government's fuel duty cut from March to filling stations. The investigation comes as the average price of filling up the tank of a typical family car last month exceeded triple digits in UK currency for the first time ever.
UK gasoline prices surged to a record earlier this week while soaring fuel prices put upward pressure on inflation in Britain-at a 40-year high-and the cost of living for Britons who have seen skyrocketing energy, fuel, and food prices in recent months. At the end of last month, a survey by the Office for National Statistics (ONS) showed that a total of 45 percent of UK adults have cut back on non-essential journeys in a vehicle amid soaring fuel prices.
The CMA published on Friday its findings of the urgent review which Business and Energy Secretary Kwarteng requested last month.
The review found that "the main drivers of increased road fuel prices are: the rising cost of crude oil; and a growing gap between the crude oil price and the wholesale price of petrol and diesel - the so-called 'refining spread'," the authority said today. The so-called 'refining spread' tripled in the last year, the CMA said.
"While there is no escaping the global pressures pushing up fuel prices, the growing gap between the oil price, and the wholesale price of petrol and diesel, is a cause for concern. We now need to get to the bottom of whether there are legitimate reasons for this and, if not, what action can be taken to address it," said Sarah Cardell, CMA General Counsel.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More