It comes after Kwarteng wrote to fuel retailers last month asking them to do ‘everything possible’ to ensure drivers get a fair deal. Earlier this week, he asked for the CMA’s opinion on the extent to which competition has ‘driven the pass-through of reduced fuel duties to consumers and the reasons for local variations in road fuel prices’ .
In his answer (1-page / 115 KB PDF), the CMA said global factors such as the war in Ukraine were “main drivers” of recent fuel price hikes, but agreed to a “short and focused” review. of the market – including geographic factors and localized competition. The regulator said it would “engage with industry stakeholders and automotive organizations” to gather “strong evidence” for its analysis.
The CMA’s initial report, which is due to be published on July 7, will provide guidance to the government on steps that could be taken to improve outcomes for consumers across the UK. The CMA Board of Directors will then determine if further work, such as market research, may be required. The regulator urged anyone “with evidence of business cartels or other unlawful anti-competitive behavior” to come forward.
Alan Davis, competition law expert at Pinsent Masons, said: “This intervention aligns with the CMA’s focus on tackling the cost of living crisis, which has been exacerbated by the dispute in course in Ukraine.. In 2013, the CMA’s predecessor, the Office of Fair Trading, reviewed the UK petrol and diesel fuel sector and found no significant competition concerns. The next CMA review will be a narrow, truncated exercise, to be completed in less than four weeks instead of the usual one year time frame for market research conducted under the Enterprise Act 2002.”
Davis added, “BEIS is committed to making its resources ‘fully available’ to the CMA so that it can ‘have access to the best possible up-to-date information and analysis’ to inform the CMA’s advice. The short time frame, however, may place significant pressure on stakeholders required by the CMA to provide information as part of the review. The CMA will also need to ensure that procedural safeguards are respected despite the expedited nature of the review.
Competition authorities from other European countries, including Germanyalso focus on rising fuel prices.
