Petrol retailers in row with government over ‘rip off’ accusations

19 hours ago

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Faisal Islam,Economics editor,

Lucy Hookerand

Mitchell Labiak,Business reporters

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Petrol forecourt retailers have hit out at the government’s “inflammatory language” on profiteering since the oil price surge following the US-Israel war with Iran, arguing that it has led to staff abuse.

The jump in oil costs has caused petrol prices to jump to an 18-month high, according to motoring organisation, the RAC.

It has prompted the government to say the competition watchdog was primed to step in to stop “rip offs”, but the Petrol Retailers Association (PRA) has said price gouging suggestions are incorrect.

The group briefly threatened to withdraw from a meeting between the industry and Downing Street over the comments, but did eventually attend.

Energy Secretary Ed Miliband said in a press conference ahead of the meeting the government wanted to “ensure consumers are treated fairly this crisis”, noting that the competition watchdog had raised concerns about the market in December.

Prime Minister Sir Keir Starmer said on social media ahead of the meeting: “If fuel companies try to rip off customers, my government will step in.”

Miliband told the BBC: “We will not tolerate unfair practices, price gouging.”

“It’d be completely unacceptable for anyone to use this crisis, to rip people off,” he added. “And we will fight people’s corner to stop that happening.”

Gordon Balmer, executive director of the PRA, said: “Recently I have heard of incidents from some of our members of retail staff being abused by members of the public, who may have been provoked by the incorrect and inflammatory language emanating from some commentators, for example, use of the terms ‘rip offs’ and ‘profiteering’.”

At around lunchtime, the PRA had pulled out of Friday’s meeting over concerns about media presence. It agreed shortly afterwards to take part when the government confirmed journalists would only be there for the start of the meeting.

Following the meeting, the PRA said talks were “constructive”.

The CMA said in December that competition remained “weak” between petrol stations, and profit margins for retailers were “persistently high”.

It has also previously found evidence of “rocket and feather” pricing following Russia’s invasion of Ukraine, with prices going up quickly when wholesale prices increase, but falling more slowly when wholesale prices dropped.

However, it has not yet ruled on whether or not there has been profiteering in response to the current wholesale price surge, though it is looking into this.

According to the latest data from the RAC, petrol prices have risen to 140.60p per litre on average across the UK from 132.83p before the war began. Diesel has climbed to 159.18p from 142.38p over the same period.

“Drivers deserve - and should expect - to be treated fairly when it comes to filling up, especially with pump prices still heading north,” said the RAC’s head of policy Simon Williams.

“We therefore hope the meeting between the fuel industry and government on this important issue is productive.”

Earlier in the week, Reeves pointed to a variation in prices on different forecourts, urging people to use the government’s Fuel Finder tool.

Petrol retailers have said the price discrepancy is because some forecourts buy oil in bulk weeks in advance, meaning the surging oil price has not fed through to the pump yet, while others buy oil at the daily price, meaning the price is quickly feeding through.

The government is under pressure to take action in both the short and long term on the threat of rising energy bills, as the effective embargo continues in the Strait of Hormuz, a crucial channel for energy supplies.

Some energy companies and industrialists have argued that the response to the current oil price shock should be to allow further exploration and production in the North Sea.

Miliband argued instead that the “right answer” for energy security as well as for tackling climate change was to continue producing oil and gas from currently operating North Sea fields but not to permit new ones.

He said granting new licences “will not take a penny off people’s bills” and pushed back against calls to change tack on net zero, arguing the UK needed to get off the “fossil fuel rollercoaster”.

“We’ve got to have clean, homegrown power that we control,” he said. “That’s the biggest long-term lesson of this crisis.”

Miliband is also launching a fast-track process for the building of new nuclear power stations, which in the past have been beset with delays, spiralling costs and red tape.

The Green Party said it agreed with Miliband on the need to move away from fossil fuels, but argued the government should also fund home insulation and introduce a “proper windfall tax” on the oil and gas industry.

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Meanwhile, heating oil customers have told the BBC their bills have more than doubled.

There is no cap to limit the cost of heating oil in the way households benefit from regulator Ofgem’s price cap on gas and electricity bills.

Miliband said he and the chancellor were “really concerned” over what was happening in some parts of the market and had met the CMA earlier in the week to discuss heating oil and motor fuels specifically.

Whether the government took further steps to support households would depend on how long the conflict lasted, Miliband added.

Fuel duty, which is currently frozen, is set to rise in September. That was now under review, Miliband confirmed.

Shadow transport secretary Richard Holden said Reeves “could cancel the fuel duty rise, she could cut the taxes piled on to energy, she could stop piling costs on to the price of fuel - but she isn’t doing anything because she doesn’t have the backbone”.

Ed Miliband

Richard Holden

Oil & Gas industry

Renewable energy

Iran war