Chancellor Rachel Reeves has asked the Competition and Markets Authority (CMA) to 'crack down' on 'rip-off' fuel prices, ahead of a meeting with energy bosses to warn against profiteering amid the Iran war. Reeves insisted she 'will not tolerate' firms exploiting uncertainty in the Middle East for excess financial gain, as concerns grow over its impact on the cost of living.
The Government has promised to intervene if companies engage in 'unfair' practices that would hit customers facing a rise in the price of home heating oil, which is not covered by Ofgem's energy price cap. The Treasury said Reeves and Energy Secretary Ed Miliband will press petrol retailers and energy suppliers to ensure drivers are not left paying 'over the odds' in a Downing Street meeting on Friday.
Ahead of the talks, Reeves wrote to the CMA requesting it to stay on 'high alert' for 'unjustifiable' price hikes. 'I will not tolerate any company exploiting the current situation to make excess profits at consumers' expense. I'm backing drivers and families – and I expect a fair deal at the pump,' she said.
However, the AA warned that consumers 'will be stung' with inevitable rising costs due to a global hike in prices, and called on Reeves to delay a planned increase in fuel duty. Edmund King, president of the motoring organisation, said: 'As the conflict in the Middle East continues, the global increase in oil prices will hurt inflation, particularly with the diesel price hikes. We strongly encourage the Chancellor to delay the staggered reintroduction of the 5p fuel duty discount.'
The CMA has put fuel retailers 'on notice' of plans to step up monitoring of petrol and diesel prices, bringing forward formal requirements to supply revenue, costs and sales data. The watchdog will also consider whether there is evidence of 'rocket and feather pricing'. Meanwhile, the RAC reported diesel prices had risen by nearly 9% since February 28, with petrol prices up 6% over the same period.
Shadow transport secretary Richard Holden criticised Reeves, saying: 'She 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.' In an interview with the BBC, Miliband did not rule out direct support or extending the freeze on fuel duty in the event of a prolonged war, but said the Government would not row back on net zero action.
