- CMA proposes real-time fuel price program for consumers
- Asda fined £60,000 for failure to provide information in CMA investigation
- CMA suggests new petroleum monitoring organization for fuel market oversight
According to the Competition and Markets Authority, a new fuel discovery program should be implemented so that consumers can view real-time gas prices. It also stated that the program should be administered by a new petroleum monitoring organization.
An investigation revealed that increased supermarket profit margins resulted in drivers paying 6 pence per liter more for petroleum in the past year.
Asda has also been fined £60,000 by the Competition and Markets Authority (CMA) for failing to provide information when required.
It appears in the final report of the regulator’s yearlong investigation into the petroleum market.
Asda was issued two £30,000 penalties for failing to respond completely to a mandatory request for information, according to the CMA, and for sending a representative to a mandatory interview who was unable to provide evidence on pre-notified topics.
The watchdog investigated whether “any failure in competition” was driving up fuel costs.
As a result of Asda and Morrisons deciding to increase the amount of money they make on petroleum, and Sainsbury’s and Tesco basing their pricing on local competitors rather than reacting to cost fluctuations in the market, it was determined that competition has “weakened.”
The regulator stated that there was no proof of “cartel behaviour,” and there were no plans to punish against stores.
Instead, the CMA proposes a legislative requirement for petroleum companies to post real-time fuel pricing data. This would allow consumers to view real-time gas station prices on their smartphones or satnavs.
The government will support and alter the law to require retailers to disclose updated price information.
The CMA has also proposed a new petroleum monitoring organization. Such an organization would establish the petroleum finder program.
The CMA had previously stated that supermarket fuel prices were approximately 5 pence per liter more costly in 2022 compared to pre-pandemic levels and that factors other than the invasion of Ukraine have impacted the price customers pay at the pump, with a lack of competition also contributing to increases.
The Petrol Retailers Association told that independent forecourt operators have struggled to compete with supermarkets.
The CMA ordered that Asda rectify thirteen issues with its proposed acquisition of Co-op gas stations in March.
The CMA is conducting a comparable investigation into competition and food prices.
Last week, Chancellor Jeremy Hunt convened with regulators, including the CMA, to press suppliers to reduce prices.
A spokesperson for Asda stated, “Despite record inflation, we have carefully managed our business to ensure that Asda was the cheapest traditional supermarket for groceries and petroleum throughout the period examined by the CMA, and this position has not changed.
“The penalty notices relate to two individual alleged technical violations in the manner in which information was shared with the CMA over a twelve-month period, during which a significant number of documents were shared with the CMA to aid their study and we engaged with their inquiries thoroughly.”
A spokesperson for Morrisons stated that the company is “extremely competitive” in its petroleum pricing. Although margins have grown, they remain extremely modest.
“Fuel margins do not include electricity, rent, and staff expenditures. Which have increased significantly due to the cost of living crisis, while volumes have decreased since COVID,” the spokesperson explained.
The modest increase in fuel’s profitability has been crucial to our ability to invest in maintaining and lowering retail prices.
