Supermarkets Urged to Join Government's Fuel Price Transparency Scheme to Curb Overcharging

Supermarkets and other fuel retailers have been advised to voluntarily participate in a government-backed system designed to share real-time fuel prices, with the goal of preventing overcharging. They have until August to join the initiative, which was launched following a report that revealed drivers paid an extra 6p per litre at supermarkets in 2022 due to insufficient competition.

The new system will allow motorists to compare live fuel prices online, helping them find more affordable options. However, FairFuelUK, a campaign group advocating for fair fuel pricing, remains cautious, stating that the "jury is still out" on the plan’s effectiveness.

Energy Secretary Grant Shapps is set to meet with leaders from major supermarkets, including Asda, Tesco, Morrisons, and Sainsbury's, along with other significant fuel retailers, on Monday. These retailers will be held accountable for any failure to pass on savings to consumers.

Announcing the scheme earlier in July, Shapps emphasized the government's commitment to exposing "rip-off retailers." Retailers have until next month to voluntarily participate in the Competition and Markets Authority (CMA) scheme, which aims to improve transparency and increase competition by requiring them to share real-time fuel prices.

The Department for Energy Security warned that failure to comply with the voluntary system would result in mandatory participation through legal measures. "Act now or face the full force of the law," the department stated.

Following Russia's invasion of Ukraine last year, petrol and diesel prices surged to record highs but have since decreased significantly. Despite this, the CMA— the UK's competition watchdog— investigated the UK fuel market earlier this year amid concerns that falling wholesale prices were not being passed on to consumers.

The CMA concluded that competition in the fuel market was "not working as well as it should be." The watchdog's investigation found that supermarket fuel margins had increased by 6p per litre between 2019 and 2022, leading to an additional £900 million in costs for drivers.

Howard Cox, founder of FairFuelUK, has been campaigning for greater transparency and fairness in fuel pricing since 2010. He expressed skepticism about the voluntary nature of the new system, stating, "If it doesn’t have teeth, there will need to be full regulatory powers and fines for retailers. The jury’s still out for me. We’ll wait to see what comes out of Monday’s meeting."

Cox proposed a "kitemark system" in which retailers would commit to providing "honest and fair prices," making it easy for drivers to identify trustworthy retailers. He criticized the current system as "opaque" and called for mandatory daily updates of real-time prices from every fuel station and retailer, allowing consumers to finally understand how prices are determined.

"The saying 'up like a rocket, down like a feather' couldn’t be truer when it comes to fuel prices," Cox added.

Earlier this month, the government announced that under its new initiative, drivers would have access to live, station-by-station fuel prices on their phones or satnavs. Currently, fuel price information is only available at the petrol stations themselves, making it difficult for consumers to compare prices. While some websites attempt to compile this data, driving groups have long argued that a more transparent system, similar to those used in other parts of Europe, is overdue.

The government’s initiative aims to address this by making fuel pricing more transparent and competitive, ultimately benefiting consumers.