Currently reading: CMA review finds fuel prices not falling fast enough
Competition and Markets Authority analysis finds evidence of “rocket and feather” pricing for fuel during 2022

A review of the rising cost of fuel in the UK has found evidence that retailers engaged in “rocket and feather” pricing during 2022.

The Competition and Markets Authority (CMA) said fuel prices rose in line with increased wholesale costs, but fell more slowly when those were reduced.

This was especially evident for diesel: a significant proportion of Europe’s supply typically comes from Russia, so its wholesale price rose disproportionately (compared with petrol) during 2022.

The watchdog observed that, during 2022, 80% of a wholesale price change translated to the pump within six weeks, but increases were more quickly passed on to motorists than decreases.

These findings coincided with an increase in retailers’ profits, said the CMA. However, it noted that further investigation is required to determine whether this was linked to the “rocket and feather” pricing, or whether it was coincidental.

The CMA added that it did not find evidence of rocket and feather pricing before 2022.

However, the RAC disagrees with this aspect of the CMA’s findings. Fuel spokesman Simon Williams said: “Volatility has unquestionably been an issue in fuel pricing since Russia invaded Ukraine, but when wholesale prices trend down for weeks at a time, drivers should see pump prices do the same at a similar rate. Unfortunately, our data shows that this is not often the case.

"What’s happening now – as it was last December – is a massive downward shift in the price of wholesale fuel with a slow dropping of forecourt prices. Consequently, drivers are set for a more expensive time on the roads this Christmas than [they] should be.

“The wholesale price of petrol has fallen from 130p a litre at the beginning of October to 109p yesterday – a drop of 21p. Meanwhile, the average price of unleaded at the end of October peaked at 166.88p but has to date only fallen 8p to 158.91p. Even accounting for the accepted lag for cheaper wholesale prices to filter through to forecourts, this is too slow, particularly as the biggest retailers buy new stock so often.

“The situation with diesel is even worse as it has plummeted by 33p over the same period but the average retail price has only come down by 8.4p from 191.12p to 182.71p yesterday.

“We strongly urge the biggest retailers to lower their prices. Unfortunately, we fear they are holding out, hoping for a rise in the price of oil later this month.”

This year has been the most volatile on record for fuel prices. They rose a record 50p per litre between January and July, the CMA said.

Meanwhile, the difference in price between petrol and diesel grew to a record 24p per litre.

Back to top

Regional disparities were also a problem. The CMA found pump prices were likely to be higher at petrol stations with few competitors nearby. This was especially true of locations without a supermarket petrol station.

The CMA’s review – launched in July after it found a difference of around 10p per litre between wholesale and pump prices – will now continue to the spring.

Sarah Cardell, interim chief executive of the CMA, said: “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. 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.”

Charlie Martin

Charlie Martin Autocar
Title: Editorial Assistant, Autocar

As a reporter, Charlie plays a key role in setting the news agenda for the automotive industry. He joined Autocar in July 2022 after a nine-month stint as an apprentice with sister publication, What Car?. He's previously contributed to The Intercooler, and placed second in Hagerty’s 2019 Young Writer competition with a MG Metro 6R4 feature

He is the proud owner of a Fiat Panda 100HP, and hopes to one day add a lightweight sports car like a Caterham Seven or a Lotus Elise S1 to his collection.

Join the debate

Add a comment…
russ13b 7 December 2022

only 2022? Hasn't this always happened?

Peter Cavellini 7 December 2022

 Not going to happen, needs Government intervention, I know, not much of a solution given all the other problems we've all dealing with, so, yeah, a windfall Tax is the strat point.

moosehound65 7 December 2022

and surprisingly no comments from the retailers association - would have been beneficial to ask them.

with duties due to rise again , perhaps a windfall tax might be appropriate above a certain level of profits