Pressure to reduce motorway service pump prices
It’s well known that filling up at a motorway service station is considerably more expensive than filling up your tank elsewhere, so we’re sure that the industry will welcome the news that the Competition and Markets Authority is considering a government request to look into the high prices charged for fuelling up at the services.
Chris Grayling, the transport secretary, has written to the Competition and Markets Authority, noting that prices per litre at service stations can be almost 19p more than they are elsewhere. He wants them to investigate, in order to be sure that the prices paid by customers are fair and realistic. While supermarkets and petrol stations around town have each other for competition, Mr Grayling is concerned that such competition doesn’t seem to exist amongst fuel providers at motorway services, so there’s no motivation for them to keep their prices down, which in turn offers a far better outcome for customers.
Of the 112 service stations in the UK, there are three operators with the lion’s share – Road Chef, Moto and Welcome Break. Their defence focuses around the argument that their costs are significantly higher than any other sort of petrol station, as they must maintain the opening hours directed by the UK government, and pay higher infrastructure costs.
Currently, 20% of drivers using petrol pumps at motorway services have told the RAC that they put in the bare minimum amount of fuel to get them to somewhere which provides cheaper prices. March seemed a relatively stable month for fuel prices, even though the wholesale cost of both petrol and diesel increased. On average, one litre of unleaded came in at just over £1.20, which was an increase of 0.06p, and a litre of diesel was just over £1.22, which was an increase of 0.01p.
While the Competition and Markets Authority doesn’t have to carry out an investigation, it did admit that it was certainly considering Mr Grayling’s request, although it should be pointed out that a 2012 investigation by the Office of Fair Trading found that there was no evidence of providers colluding to increase prices. If a new investigation was to happen, it would be very interesting to see how that affects prices.
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