Hidden line in Budget 2024 is huge win for drivers frustrated with petrol prices
Aside from the freeze on fuel duty and an increase in car tax for electric vehicles, the Government also wants to make petrol and diesel prices fairer.
Fuel sellers will have to publish the price of petrol and diesel in an official database - a move Labour believes could bring the cost down by 1-6p a litre.
NimbleFins previously reported how the Tory Government was considering bringing in the scheme where fuel stations would have to publish the price of their petrol and diesel and submit it to a central body.
The Chancellor at the time, Jeremy Hunt, had asked Treasury officials to look at blueprints for both a voluntary scheme and legislation to enforce compliance.
At that point the scheme had not been made official.
But Labour's Chancellor Rachel Reeves has taken on the project and confirmed it would be in place by the end of 2025 - the first time a date has been set.
In the Budget, Ms Reeves said it would improve competition at the forecourts, increase transparency and empower drivers.
The Budget says: "While fuel price reactions are inevitably uncertain and sensitive to wider global factors, by increasing transparency and encouraging competition between forecourts, scenario modelling by the government suggests pump prices could reduce by 1-6p per litre as a result of these measures, helping to ensure that drivers get a fair deal for fuel across the UK."
Currently, drivers can use the petrolprices.com website to find prices of fuel near them, but it is reliant on the public inputting the prices. That means they could be out of date, or some stations not included at all.
The new scheme would create a more accurate database.
Labour said it was "accepting the Competition and Markets Authority’s recommendations" which suggested the fuel finder scheme. The CMA also recommended "a new statutory monitoring body to hold the industry to account" but it was not clear how Labour would tackle this.
NimbleFins previously reported the plans being considered by the Conservative government would see fuel prices benchmarked against wholesale market rates.
This would put pressure on sellers to bring down prices quicker when the wholesale price drops.
Analysts have repeatedly seen cases where petrol stations are quick to increase prices but slow to bring them down.
In one example, wholesale prices dropped 23p per litre in nine weeks in 2022, but there was a one month lag before customers saw the drop at the pumps, and even then prices only fell by 18p.
Reacting to the news, the RAC's head of policy Simon Williams said: “It’s fantastic to see the Government has now said it will introduce the Pumpwatch scheme and fuel price monitoring function by the end of next year as this is something we’ve long been calling for.
“This will help drivers get a fairer deal every time they fill up by enabling them to find the cheapest fuel near them and ensuring significant reductions in wholesale fuel prices are passed on to customers at the pumps.”
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