Energy secretary, Grant Shapps, appears to have pulled back on plans for a law to force supermarkets to make fuel prices more transparent, instead backing a voluntary price comparison scheme in a meeting with supermarket bosses.
Supermarkets and major suppliers met Energy Secretary Grant Shapps on Monday after the regulator found drivers were overcharged due to weak competition.
It found annual supermarket margins on fuel had increased by 6p per litre between 2019 and 2022.
Shapps on Monday endorsed the non-mandatory scheme, which had been suggested by the competition regulator, after a summit with retailers that he had promised would involve him holding “rip-off retailers” to account.
Earlier this month Shapps accused petrol retailers of using motorists as “cash cows” after the CMA found that some retailers had been making 6p more in profit per litre on fuel as they took advantage of reduced competition arising from the Covid crisis.
The energy minister said this translated to £75m a month in extra revenue for the four supermarket fuel retailers in 2022 alone.
The CMA proposed in response that retailers be required to provide live pricing data, allowing drivers to more easily shop around for the best deals.
RAC fuel spokesperson Simon Williams said: “While we fully support Mr Shapps’ attempt to get the supermarkets to voluntarily provide real-time pump prices ahead of legislation being passed to force them to do so, it is unlikely to bring prices down.
“What’s badly needed is an official wholesale fuel price monitoring function which has the power to fine or take action against major retailers who don’t lower their forecourt prices when wholesale costs drop significantly.
“While the Competition and Markets Authority recommended an element of monitoring wholesale prices in its report in UK fuel retailing, the RAC fears without the threat of consequence in the form of fines, the biggest retailers are unlikely to lower their pump prices quickly enough when the wholesale market trends down.
“This aspect of the CMA’s report needs to be properly addressed when legislation is put before Parliament.
“Competition only works where one or more retailers focus consistently on cutting prices to get more people to use their forecourts.
“Sadly, this is something that is currently missing everywhere but in Northern Ireland where fuel retailing is fairer on drivers.”