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Petrol retailers accused of not passing on tax cut to drivers
Business secretary Kwasi Kwarteng has written to leading petrol retailers remind them to pass on tax cuts to motorists and warned he will involve the competition watchdog if firms don’t follow the rules.
The letter, sent to petrol companies on Tuesday, follows claims some retailers hiked prices following the 5p per litre fuel duty cut implemented introduced by chancellor Rishi Sunak in the Spring Statement in March.
Fuel duty was previously levied at a flat rate of 57.95p per litre for both petrol and diesel but Sunak cut this by 5p to 52.95p per litre.
But the RAC has said retailers are taking an average profit of 2p per litre more than before the policy was introduced.
Forecourt data this week shows that diesel prices have continued to rise to an all-time high.
In his letter Kwarteng said: “The British people are rightly expressing concern about the pace of the increase in prices at the forecourt, and rightly frustrated that that the Chancellor’s fuel duty cut does not appear to have been passed through to forecourt prices in any visible or meaningful way.
“It is also unacceptable that different locations even within the same retail chain have widely different prices. The chancellor and I therefore want to re-emphasise and communicate again our expectation that members do everything possible to ensure that drivers are getting a fair deal across the country.”
Kwarteng went on to warn that the Competition and Markets Authority was monitoring the situation and use its powers to act against petrol stations if there was evidence that they were infringing competition or consumer law.
Simon Williams, RAC fuel spokesman, said: “Despite the chancellor’s 5p a litre duty cut, the average price of petrol hit a new all-time high on Tuesday by reaching 167.64p a litre, further contributing to the worsening cost-of-living crisis. The significance of this landmark is made all the greater by the fact the previous petrol record price – 167.30p – was set the day before the Spring Statement when Mr Sunak slashed duty to 52.95p a litre.
“While the average price of both petrol and diesel would have been far higher without the historic duty cut, it’s also unfortunately the case that drivers haven’t seen the full benefit at the pumps due to major retailers upping their margins.
“With diesel also climbing to its third record high in four days at 180.88p drivers are feeling never-before-seen pain at the pumps – a full 55-litre tank of petrol now costs £92.20 and diesel £99.50.”
