Families paying an extra £500 a year to fill up cars with petrol

Fuel prices seen at Wetherby Services last month. (PA)
Fuel prices seen at Wetherby Services last month. (PA)

The competition watchdog has launched a probe into fuel prices as families with a medium-sized car are now paying an extra £500 a year for petrol amid the cost of living crisis.

The Competition and Markets Authority’s (CMA) Road Fuel Review cited figures from Which? estimating that price increases in the 12 months to June mean the average motorist will now spend £1,787 to fill up their car with petrol over the following year: up £506 from £1,281.

This comes as the price of a litre of both petrol and diesel has gone up by over 60p in the past year.

The CMA’s review found the increase from the crude oil price - when it enters refineries - to the wholesale price - when it leaves them as petrol or diesel - has more than tripled in the last year.

The watchdog said “we now need to get to the bottom of whether there are legitimate reasons for this and, if not, what action can be taken to address it".

Watch: Protesters block motorway in stand against cost of fuel (from Monday)

It has initiated a formal market study investigating all levels of the supply chain - refining, wholesaling and retailing - to “consider what more can be done to improve outcomes for consumers”.

It comes amid growing discontent at the spiralling fuel prices. On Monday, there were a series of “go-slow” road protests in which drivers gridlocked motorways and A-roads.

And RAC fuel spokesman Simon Williams, reacting to Friday’s report and the CMA’s announcement of a market study, said: “We are particularly pleased to see that the CMA acknowledges the gap between wholesale and retail prices has been widening in recent weeks.

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“Regardless of the reasons for wholesale prices being what they are, we continue to believe there is clear evidence, not least in the last week, that major retailers are incredibly slow to pass on falling wholesale costs, yet quick to pass on rising ones.”

Meanwhile, in March, a 5p-per-litre reduction in fuel duty was introduced by the government. The CMA said in its report that "on the whole" the cut has been implemented, "with the largest fuel retailers doing so immediately and others more gradually".

The CMA report was released on the same day as Office for National Statistics (ONS) "social trends" data which found 79% of adults in Great Britain are currently reporting fuel prices as a reason for their cost of living going up.