Petrol stations accused of pocketing fuel duty cuton July 4, 2023 at 9:43 am

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Treasury Select Committee chair claims retailers not customers benefitted from the tax cut.

Man filling car with fuelImage source, Getty Images

Petrol stations and retailers have “pocketed” the benefit of a 5p fuel duty price cut, the chair of the Treasury Select Committee has claimed.

Conservative MP Harriet Baldwin accused retailers of not passing on the tax reduction to drivers.

The UK’s competition authority has found that drivers paid an extra 6p per litre for fuel at supermarkets.

It said on Monday retailers had passed on the fuel duty cut to customers, but had charged more than they should.

“The thing that annoys me from a Treasury point of view is that the Chancellor cut fuel duty by 5p to help families with their cost of living and yet it doesn’t seem to have been passed on,” Ms Baldwin told the BBC’s Today programme.

“The CMA highlights that it actually 6p per litre extra that the retailers are pocketing in margin so basically that whole £2.4bn cost to the Exchequer has gone straight to the bottom line of the petrol retailers.”

The competition watchdog has been investigating the UK fuel market following concerns that falling wholesale prices are not being passed on to consumers.

It said supermarkets were usually the cheapest place for fuel but competition was “not working as well as it should be”.

Petrol and diesel prices spiked to record highs in the aftermath of Russia’s invasion of Ukraine, but have since dropped.

The CMA said it plans to force supermarkets and other fuel retailers to publish live prices under a new scheme aimed to stop overcharging.

But last week, supermarkets bosses, who were quizzed over fuel and food prices by MPs, denied they were making too much money from higher prices.

Morrisons’ chief executive David Potts told the Business and Trade committee that the supermarket passed on the 5p cut to customers “one the same day” it was announced.

He said energy, transport and labour costs had “all added to the oil barrel”, but added “we can always do more”.

“Right now the prices on our supermarket forecourts are lower than the independents and continue to be so,” he said.

The BBC has contacted the Petrol Retailers Association, which represents independent forecourts, for comment.

All supermarkets have backed the idea of a price transparency scheme, similar to the type in place in Northern Ireland, where fuel is cheaper.

However, the CMA has admitted petrol and diesel in Northern Ireland is less expensive than in other parts of the UK because of competition from filling stations in the Republic of Ireland.

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