4:09 PM 16th January 2024
Real-Time Pump Prices To Drive Down Fuel Costs For Motorists
Millions of drivers will be able to get the latest petrol station prices at the click of a button, as the government sets out next steps to bring fair prices back to the pumps and transform how the UK shops for its fuel.
Consumers, retailers, and other organisations are today (16 January), being asked for views on the government’s proposals for the new Pumpwatch scheme
which would see all fuel stations across the country legally required to share real-time price information with an organisation to be appointed by the government.
Under the new proposals, forecourts across the country will be legally required to share live information on their pump prices within 30 minutes of any change in price, which could save drivers 3p per litre on fuel by helping them find the best deal at the pump.
This freely available data will enable tech companies to develop new ways for the UK’s 41.2 million drivers to search for the cheapest fuel while on-the-go - via everyday mobile apps, online mapping platforms, journey planning tools, price comparison websites and in-car devices. A similar statewide scheme in Queensland, Australia saw drivers save on average $93 (£48) per year, by making it easier for them to shop around for fuel.
Forcing retailers to be transparent about how much they are charging and giving drivers access to price comparison technology - already widely used by customers when booking flights or buying insurance, for example – will help drive down prices by reigniting competition and empowering drivers to find the best deals.
The government has acted after some fuel retailers were found to be overcharging customers, and already there are signs that fairer deals are returning to forecourts. Since these interventions, fuel prices have fallen by an average of around 2p per litre every week between 13 November and 25 December, bringing petrol prices down to a level not seen since October 2021.
This comes as the government delivers its target to halve inflation – now at its lowest rate in 2 years at 3.9%, with fuel prices the main factor behind this slowdown.
It also comes on top of the government’s temporary extension to the 5p fuel duty cut announced last year, which has saved the average driver £200 over 2 years.
Energy Security Secretary Claire Coutinho said:
"Our work on competition and transparency is working. Drivers are now paying the lowest average price at the pump for 2 years.
"We are forcing retailers to share live information on their prices within 30 minutes of any change in price, helping drivers to find the best deal at the pump.
"This will put motorists back in the driving seat and bring much-needed competition back to the forecourts."
Twelve of the biggest retailers, including all 4 fuel-selling supermarkets, have already signed up to an interim voluntary scheme run by the Competition and Markets Authority (CMA) to share their daily prices – with some news outlets and websites using this data to offer price comparisons.
Last year, a report by the CMA revealed some retailers had failed to pass on savings in oil prices - charging drivers 6p more per litre for fuel, which amounted to £900 million in extra costs in 2022 alone.
At the end of 2023, the government appointed the CMA as the body responsible for monitoring the road fuel market, to increase transparency and competition in fuel pricing. The watchdog will also shine a light on any attempt from retailers to overcharge drivers, advising government on any further action required to make competition work well.
Energy Security Secretary Claire Coutinho previously warned retailers against any attempt to hike up prices.
Minister for Energy Affordability and Skills Amanda Solloway said:
"We will always act to help keep costs down and ensure hardworking people are getting a fair deal.
"Our plans are laying the foundations for new fuel finder tools, making it easy for drivers to find the cheapest deals.
"I’m pleased that following government action, many retailers are already taking steps to help bring back competitive prices to the pumps."
Recent government statistics show that road fuel prices were around 5p per litre lower on 25 December compared to the start of the month. This continued a decline in prices, which decreased by an average of 2.1p per litre per week between 13 November and 25 December. Over the 4 weeks between 9 October and 6 November, petrol pump prices fell by 2.7p per litre. Prices then fell by 4.4p per litre over the 2 weeks between 13 and 27 November.
The consultation launched today also covers some elements of the CMA’s new role in monitoring the road fuel market. Industry have been asked for their views on several areas, including the topics the CMA will focus on, the frequency of reporting, and support to help businesses with the CMA’s information requests.
The government is also backing consumers through new legislation under Digital Markets, Competition and Consumers Bill that will deliver on a manifesto commitment to tackle consumer rip-offs and bad business practices, including fake reviews and subscription traps. The Bill introduces new powers for the CMA to take action against bad business practices more quickly, without needing lengthy court action and with penalties for those breaking consumer law.
RAC fuel spokesman Simon Williams said:
"This is a really important day as it should pave the way for fairer fuel pricing for everyone who drives.
"Sadly, there have been far too many occasions where drivers have lost out at the pumps when wholesale prices have fallen significantly and those reductions haven’t been passed on quickly enough or fully enough by retailers.
"We badly need to see competition in the wider market match that of Northern Ireland where fuel prices are consistently 5p cheaper."
Edmund King OBE, AA president, said:
"The AA commends the government for addressing the issue of unfair pump prices that we have been raising for some time. The brazen price disparity of sometimes 10p a litre or more between neighbouring towns had to end. Pumping up profits by hanging on to the savings from lower fuel costs while consumers, businesses and inflation were denied the relief was quite simply unforgivable.
"The government’s proposal should stimulate fairer pricing through free market competition and takes advantage of latest information technology. It gives leeway to fuel retailers to price according to their circumstances but, by directing motoring consumers to where they can get their fuel at a better price, keeps competitive pressure on the trade."