Kwarteng tells CMA to investigate pump prices

In a letter to CMA chief executive Dr Andrea Coscelli, Kwasi Kwarteng said that fuel pump prices have risen to unprecedented levels due to a series of events including the Ukraine invasion and world economies “unlocking” following the pandemic.

And he has given the CMA until 7 July to respond.

“We have taken action to support motorists by cutting fuel duty for petrol and diesel in a £5 billion package,” he wrote.

“Despite this action, there remains widespread concern about the pace of the increase in prices at the forecourt and, that prices may not fall as much or as fast as they rise.”

Mr Kwarteng said British people are feeling frustrated that the support package does not seem to have been passed on to some towns where prices remain high.

“Healthy competition between forecourts is key to achieving this, with competition working to keep pressure on prices,” he said.

“For these reasons, I am writing to you to ask that the CMA conduct an urgent review of the fuel market, as well as a longer-term market study under the Enterprise Act 2002, to explore whether the retail fuel market has adversely affected consumer interests.”

The letter continued that this investigation should consider the health of competition in the market, geographical factors, including localised competition, and any further steps that the government or the CMA could take to strengthen competition, or to increase the transparency that consumers have over prices.

“As part of this, I would be grateful for the CMA’s advice on the extent to which competition has resulted in the fuel duty cut being passed on to consumers, and the reasons for local variations in the price of road fuel,” he said.

“While the CMA’s work will be carried out independently, my department’s resources will be fully available to the CMA to ensure they have access to the best possible up-to-date information and analysis to inform their advice.

“I also expect the members of the road fuel industry to fully support and cooperate with the CMA in preparing its advice, in the context of the significant public concern on this issue, and the critical importance to consumers and the economy.”