Sarah Jones

I start by congratulating my hon. Friend the Member for Dunfermline and Dollar (Graeme Downie) on securing this debate, making such an excellent contribution and championing the needs of consumers, both in his constituency and across the UK, where so many people have the same struggles. I welcome the opportunity to discuss the important matter of the road fuel market. This Government are committed to fixing the foundations of the economy, delivering change by protecting working people and rebuilding Britain. It cannot be the case that fuel retailers register record profits and do not pass on savings when the burden is being unduly felt by hard-working families and businesses. That is why I am so grateful for my hon. Friend’s story about Aimee. Her story is one that I suspect is familiar to many other MPs from their constituencies. We are committed to supporting people with the cost of living and the cost of fuel. I agree with my hon. Friend that, for so many, vehicles are more than just a means of transport; they are a lifeline. They play an integral role in connecting working people, families, communities and businesses, especially in rural areas. In the case of young people, including Aimee, their car is a means to forge a career and earning meaningful, well-paid work. This Government are committed to delivering for drivers, but also providing a range of transport options to make it possible that people such as Aimee should not have to worry about how they get to work. That is why this Government made the decision at last week’s Budget to freeze fuel duty for a further year, which I know my hon. Friend has welcomed. I commend his dedication to campaigning against high fuel prices and for families, working people and small businesses to get a fairer deal on fuel across his constituency and Scotland. It is imperative that we have a well-functioning, transparent and competitive road fuel market. We want to ensure that drivers can get a fair price for their fuel, and that fuel retailers remain transparent and do not overcharge. We expect all fuel retailers to pass on any savings at the pump. As my hon. Friend set out, the Competition and Markets Authority published its road fuel market study in July 2023, and it found that competition across the retail market had weakened. The CMA found problems in relation to three aspects of the retail market: national, local and motorway. At a national level, the CMA found that retail margins had risen significantly since 2019, with the supermarket retailers following a similar trend of increased margins on fuel. The historic price leaders in the market—primarily Asda, but also Morrisons to some extent—had taken a less aggressive approach to pricing and had significantly increased their margins over recent years. The rest of the fuel retailers took a passive approach and followed that trend. At a local level, the CMA found significant price differences between local areas, with lower prices at a forecourt typically associated with having a supermarket competitor nearby. I know that my hon. Friend is concerned about that and recently raised it with the Leader of the House at business questions, as he has done today in this debate by sharing Aimee’s experience. On motorway pricing, the CMA found that drivers without access to fuel cards, which account for 20% to 25% of fuel sales on motorways, were paying significantly more to fill up at a motorway service area than they would elsewhere, due to limited competitive pressure. As a result of those factors, the CMA found that drivers have been paying more than would otherwise have been the case. It is estimated that the financial impact of the 3% increase in average supermarket fuel margin from 2019 to 2022 resulted in a combined additional cost of around £900 million for customers of the four supermarket fuel retailers in 2022 alone. That is equivalent to approximately £75 million a month for this period. While fuel prices are now a lot lower than at the all-time peak in July 2022, weakened competition persists. The CMA’s latest monitoring update in July this year estimated that the increase in retailers’ fuel margins compared with 2019 resulted in increased fuel costs for drivers in 2023 of over £1.6 billion. Weak competition is still failing consumers; that is hugely concerning. The price of petrol and diesel is an important issue. When prices are high, the impacts are felt by everyone. We expect all fuel retailers to pass on any savings at the pump. As my hon. Friend said, to address these issues, the CMA made recommendations for the Government to implement an open data scheme for fuel prices, requiring retailers to share their prices on a real-time basis and allow drivers to be better informed on prices and easily compare prices, and to launch an ongoing monitoring function for the retail market to assess how well competition is working. The Government accepted those recommendations. On the CMA’s first recommendation, as part of the Budget last week, we confirmed that we will implement a statutory open data scheme called fuel finder. It will require all retail petrol filling stations in the UK to report prices and when a fuel becomes unavailable within 30 minutes of a change. The data will be shared openly and freely to third parties so that it can be incorporated into their price comparison websites or apps, sat-navs and other consumer-facing products that consumers can use. Fuel finder will empower drivers to compare prices more easily and make more informed decisions on where to buy their petrol and diesel. That will increase pressure on fuel retailers to compete strongly to attract consumers by lowering their prices or improving their services at the forecourt. The Government are committed to implementing fuel finder as quickly as possible. We will begin procurement for the fuel finder aggregator in early-2025. The Data (Use and Access) Bill that the Government have introduced will provide the legislative basis to set up fuel finder. Subject to parliamentary timings, we aim to launch fuel finder by the end of 2025. On the CMA’s second recommendation, it will receive statutory information-gathering powers through the Digital Markets, Competition and Consumers Act 2024 to undertake the permanent monitoring function. We are aiming to commence those provisions by January 2025. The CMA will be able to assess and monitor the state of competition in the retail market, both nationally and locally, provide ongoing scrutiny of prices and advise the Government if further intervention is needed to protect consumers. The transition from fossil fuel to zero carbon vehicles is likely to lead to further risks of weakening competition in the remaining fossil fuel-based road fuels market. The transition is likely to be felt particularly by less well-off consumers and those living in rural areas. The CMA will be able to monitor the market through the transition and benefit consumers by ensuring that the market continues to function properly. The CMA will therefore publish an annual report on the state of competition in the sector, three shorter updates on prices, costs and margins, and information on price trends across the UK and over time. Taken together, fuel finder and the CMA monitoring function will reinforce each other in providing a new source of competitive pressure in favour of greater competition in the road fuel retail sector.