Rural fuel prices at petrol filling stations are, on average, 1.2p/L higher than urban prices, according to new analysis by the Competition and Markets Authority (CMA).
The CMA today (Tuesday, December 6) published its initial update on its road fuel market study, which was commissioned back in June.
This study follows on from an initial urgent review in the summer, the main difference being that it has analysed fuel prices over five years rather than just the one.
While it showed difference in price between rural and urban areas, the CMA said that there is a much wider variation within the respective areas than between them.
For example, the analysis showed that prices vary widely between local areas. According to the CMA, this could be because prices are likely to be higher at petrol stations where there are few (or no) competitors nearby – and particularly where there is no local supermarket petrol station.
This is being investigated further by the CMA.
Volatile fuel prices
The analysis also showed that 2022 was the most volatile year for fuel prices since reliable records began.
From January to July, prices rose by around 50p – the largest leap in fuel prices ever recorded in one year – before falling by 31p for petrol and 14p for diesel since.
The gap between diesel and petrol prices has also become larger than ever reliably recorded, with diesel now costing 24p more per litre than petrol.
This is largely due to Western Europe’s reliance on imports of diesel, but not petrol, from Russia, the CMA said.
The report also showed evidence of ‘rocket and feather’ pricing emerging this year, particularly for diesel. This means that prices shot up like a rocket, but fell slowly like a feather.
The CMA said this could be driven by the extreme volatility of prices and supply in 2022; it is also being investigated further.
Commenting, interim chief executive of the CMA, Sarah Cardell said:
“It has been a terrible year for drivers, with filling up a vehicle now a moment of dread for many.
“The disruption of imports from Russia means that diesel drivers, in particular, are paying a substantial premium because of the invasion of Ukraine. A weaker pound is contributing to higher prices across the board too.
“There are no easy answers to this. The question for the CMA is whether a lack of effective competition within the UK is making things worse,” she added.
“Although it is only a small proportion of the overall price, the increase in margins for many fuel retailers over the last few years is something we need to investigate further.
“The key thing we need to establish next is whether this development is down to competition problems or not.”
The CMA is inviting views and comments on the emerging evidence published today, to be submitted by January 6.
A further update, including possible next steps, will be published in the spring.
