Robert Halfon is MP for Harlow, a former Conservative Party Deputy Chairman, Chair of the Education Select Committee and President of Conservative Workers and Trade Unionists.
I strongly welcomed the news over the weekend that the Prime Minister and Transport Secretary are finally getting to grips over the bad behaviour of oil companies who are fleecing motorists at the pumps and not passing on the 5p fuel duty cut.
Over the past few years, along with FairFuelUK and the FairFuel APPG, I have campaigned relentlessly in Parliament for an independent fuel pricing watchdog to protect the UK’s 37 million hardworking motorists and to help cut the cost of living.
It has become increasingly clear that, despite falling wholesale oil prices, retailers have continued to increase their prices by a disproportionate amount, meaning that consumers are continuing to pay more at the pump. Since 2016, the average yearly petrol pence per litre profits have increased by 126 percent and diesel by 99 percent. Furthermore, the average yearly profits from 2020 to 2022 were 18.2p/litre for petrol and 20.7p/litre for diesel. This means that for the last 2.4 years, the average yearly pump prices per litre for petrol have increased by 84 percent and 80 percent for petrol and diesel respectively.
As reported by Which Consumer Magazine, and widely covered in national media, millions of drivers were overcharged by as much as £10 per tank of fuel at the height of lockdown. Although supermarket pump prices sank to a four-year low of 99p a litre, in May, fuel giants still made a fortune. Many doubled profit margins by not passing on the full savings from plunging wholesale prices to consumers and charging 18p a litre more than they should have done. The difference amounted to £10 for each fill-up in an average car with a 55-litre fuel tank.
Whilst the UK faces continued economic challenges and an increase in the cost of living, the Government has made some positive financial interventions to alleviate some of this pressure. That includes the 5p per litre reduction announced in the Spring Statement. Yet the unchecked big oil brands and their fuel supply chain wholesalers have deliberately profiteered during the crisis. The evidence is overwhelming. Shockingly, one major fuel wholesaler boasted:
“Furthermore, the fuels business and its (garage) customers have benefited from a significant fall in oil prices over recent weeks which will make material contribution to profits in the short term…Demand for heating oil increased significantly in March and into April combined with a deep, sharp and sustained fall in the oil price that has enhanced margins.”
This tells us that oil companies and their wholesalers have not passed on the fall in oil prices fully and most certainly not in any way, fairly. They remain unchecked, without fear of scrutiny.
In this time of national emergency, these big companies must step up to the plate. They should support the Government’s efforts to cut the cost of living and pass on the fall in international oil prices, quickly, to those who rely on this fuel.
Not only are UK logistics businesses, essential workers and those who have to drive burdened with unjustly high fuel prices, the actions of these big corporations are severely impacting the small, independent garages they supply. Financially-stretched, small independent fuel forecourts have contacted FairFuelUK explaining that they may not be able to cover their operational expenses due to low fuel sales. If it were not for supermarket pricing fuel so much lower than the big oil firms, average pump prices would be even higher.
Now is the time for urgent action from the Competition and Markets Authority and the Government. The magnitude of potential profiteering is on a scale that commands independent investigation.
Since 2019, myself and FairFuelUK have been calling for the introduction of a PumpWatch Voluntary Pump Pricing Code. This has wide public support with 95 percent of FairFuelUK’s 1.7 million supporters wanting ‘PumpWatch’ to be formed and to work, just like other consumer pricing watchdogs such as Ofgem, Ofcom and Ofwat.
Drivers need reassurance that they are not paying way over the odds for fuel. In rural communities, for example, where public transport is poor and unreliable, people need their vehicles to get from A to B. It is essential that they pay the fairest price. In my own constituency of Harlow, many workers depend on their vehicles for their employment.
That is where a price monitoring system like PumpWatch would support them. PumpWatch is the only way to ensure that motorists are not taken for a ride by the greed of certain oil companies. It will bring the rocketing fuel rocketing prices back to earth and ensure drivers get a fair deal.