Plan Insurance Blog

Do We Need A Petrol Price Watch Scheme?

The Chancellor, Jeremy Hunt is developing plans to mirror Northern Ireland’s success in creating transparency for motorists on petrol prices.

In today’s cost of living crisis, petrol stations shouldn’t be allowed to profiteer at the expense of motorists and the wider economy.

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Fuel prices find it easy to go up, but hard to come down

By October 2022, the oil shortages and panic buying that had occurred over the previous months had stopped. Unfortunately, it seems like no one told the petrol station operators.

As we’ve covered recently in the Plan Blog, garages have been quick to increase prices due to worldwide oil shortages, but much slower to reduce prices when wholesale prices go down.

Mr Hunt has asked government officials to come up with a system that requires petrol stations to submit their prices to a central body.

Central to Hunt’s plan is motorists having easy access to different fuel prices across the country. This should bring garage pricing strategies out into the open, helping motorists make educated decisions. For example, The AA’s research showed that petrol was 13p cheaper in Ashton-under-Laune than ten miles in Rochdale.

How are other places doing it better than us?

Northern Ireland’s prices that have consistently been less than the rest of the UK. This is because they have a system that controls the cost of petrol across the entire country. The scheme is called the Northern Ireland’s Consumer Council Fuel Price Checker. France also has a similar system.

In Germany, petrol stations are required to share data with software developers, who have created tools to compare prices. That allows both motorists to make more informed decisions, and also for petrol stations to put their pricing strategies out in the open. Simon Williams of the RAC said “You wouldn’t expect them to do that with food”, he is undoubtedly right.

What will cause long-term stability in petrol prices?

Critics of Jeremy Hunt have said that websites like perform the same service he is proposing. However, the government’s proposed collation of petrol pump prices appears more of an attempt to make garage owners accountable than to allow motorists to choose better deals. It is easier to tackle this problem at petrol stations, than to force people to drive miles away to get a better deal on petrol.

One idea was setting price limits by region, and giving petrol stations that are part of the scheme a kitemark to display to drivers. This is a kind of positive PR could convince petrol stations into cooperating without the need to threaten penalities. However, people often desperately need to fill their cars regardless of additional fuel costs. So a significant number probably will either not notice or particularly care whether their nearest station has a kitemark or not.

Lowering petrol prices using honey or vinegar?

Government sources have told newspapers that Jeremy Hunt has asked officials to consider the practicalities of both voluntary and legally-binding schemes. The outcome of that decision is determined by how high the prices are at some petrol pumps, and how tightly garage owners need to be controlled.

Edmund King, president of the AA said “The success and demand for fuel price transparency in Northern Ireland was illustrated last year with a more than 500% increase in views of the Price Checker website and app”.

King believes that a similar model should be established across the UK over time, with an online price-comparison platform implemented later on. This will likely be met with resistance from those in the fuel industry. Few would disagree that there should be a close relationship between wholesale prices and pump prices, and that regulation seems like the simplest way to do this.

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