Government to consider fuel price comparison scheme

The government is contemplating the introduction of a fuel price checker which would allow drivers to compare costs of petrol and diesel.

The Transport Secretary Anne-Marie Trevelyan said the online tool would be similar to one used in Northern Ireland.

A recent review of the UK's road fuel market found significant differences in rural and urban areas.

Fuel prices have been volatile due, in part, to the price of crude oil.

On Thursday, Jerome Mayhew, a Conservative MP for Broadland in Norfolk, said he'd been "struck by the effectiveness of price comparison requirement used in Northern Ireland to consistently have lower forecourt prices", and asked if the policy was being considered in England.

Ms Trevelyan said the price of fuel in Northern Ireland has been historically lower than the rest of the UK for a "number of reasons".

"But we absolutely consider that the fuel price checker, which is provided by the Consumer Council in Northern Ireland - along with cross border competition with those petrol stations in Ireland and lower overhead costs - are indeed part of the reason for those costs," she continued.

"We are considering that possibility to help us assess our own," she added.

Following sharp rises earlier this year, petrol and diesel prices had fallen over the last three months. However, according to the AA, they have started to increase again.

A review of the road fuel market by the Competition and Markets Authority, published in July, found "cause for concern" in some parts of the industry.

It suggested "an open data scheme could help consumers more easily access and compare local pump price information".

In a response published on Wednesday, the government welcomed the idea. It said the feasibility of introducing a scheme would be assessed, including if it would have an impact on fuel price transparency.

Evidence will also be considered from similar schemes in other countries including Germany.

A spokesman for the RAC said the motoring organisation hoped fuel price comparison would incentivise more competitive pricing.

However, he said retailers may "just 'price match' one another at levels that still don't fairly reflect wholesale prices" and drivers needed an indication of whether retailers were charging a fair price in the first place.

The CMA is now doing a 'thorough' review of pricing. Its initial findings will published this autumn.

In its original review, the CMA found that "motorists face higher prices in some parts of the UK than in others".

It said fuel price competition usually takes place at a local level, meaning that retailers will set prices based on what local rivals are charging, "and work to the benefit of motorists".

If there are few competitors in one area, then drivers could end up paying more for their fuel.

The CMA said: "A competitive retail fuel market can be particularly important to rural communities, which tend to be more reliant on cars as a means of transport."

It said rural areas pay on average 1p-2p per litre more for road fuel: "Although in some areas the difference will be substantially more."