The CMA is the statutory body charged with regulating free and fair commercial competition within the UK. This means the investigation and punishment of commercial undertakings that behave in a way which is anti-competitive. The CMA is little known in the general public. It has powers of dawn raid search and seizure and to fine commercial undertakings up to 10% of their global turnover. In short, it has a claim to be the most powerful organisation in the UK, which brings us to the price of petrol at the pumps. It is a cliché that petrol prices go up like a rocket and come down like a feather.
On 8 July 2022 the CMA published a report of its initial findings into ‘The Road Fuel Market’. The main findings of the report are:
- There was an increase in the cost of crude oil
- There was an increase in refining spread (the price difference between crude oil prices and the wholesale prices of diesel and petrol
- The refining spread multiplied by a factor of three in 2021/22 from 10p to nearly 35p per litre
- The retailer spread (the difference between the wholesale petrol and diesel price and the price at the pump was about 10p per litre
- The price at the pump in rural areas was much greater than in urban areas
The CMA has compulsory powers of information gathering and can appear at premises, without notice, to demand documents and search and seize equipment – dawn raid powers. What is at the heart of the concerns of the CMA is the growing chasm between the wholesale price of crude oil and the whole sale price of petrol and diesel. The CMA admitted the global pressures on fuel prices. Further, this initial report found the retail market (price at the pump between retail sellers of petrol and diesel) was fairly competitive on the horizontal level.
The CMA has decided to prioritise this investigation with a report due in the Autumn.
Jonathan Compton
LLB LLM Solicitor Barrister MCIArb