Petrol prices: UK watchdog raises concerns over refinery margins
The UK’s competition watchdog has raised concerns over the margins made by refineries amid sky-high fuel prices on forecourts across the country.
The Competition and Markets Authority (CMA) said it has “found cause for concern in the growing gap between the price of crude oil when it enters refineries, and the wholesale price when it leaves refineries as petrol or diesel”.
The business secretary, Kwasi Kwarteng, last month asked the competition watchdog to carry out a “short and focused” review into the fuel sector amid claims that petrol retailers were profiteering.
Retailers had been accused of not passing on a 5p cut to fuel duty announced in the former chancellor Rishi Sunak’s spring statement in March.
However, the CMA review found “on the whole the fuel duty cut appears to have been implemented, with the largest fuel retailers doing so immediately and others more gradually”.
The watchdog said the main drivers of increased road fuel prices were the rising cost of crude oil and a growing gap between the crude oil price and the wholesale price of petrol and diesel, known as the “refining spread”. It said the refining spread had tripled in the last year, growing from 10p to almost 35p a litre.
The CMA will now begin a deeper investigation into the fuel sector, with an interim report due in the autumn.
Fuel prices have hit record highs in recent weeks. The RAC said the average cost of a litre of petrol rose 16.59p in June, breaking the previous 11p record rise in a single month in March. This week drivers staged protests over prices.
Sarah Cardell, the CMA general counsel, said: “The recent rises in pump prices are a major worry for millions of drivers. While there is no escaping the global pressures pushing up fuel prices, the
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