The Competition and Markets Authority (CMA) published its Road Fuel interim update on 9th November. The final report of the CMA’s road fuel market study recommended that the government take two steps: First, introduce a statutory fuel finder scheme to give drivers access to live fuel prices and second, create a new statutory monitoring function to hold the industry to account for its fuel pricing. As an interim measure, the then Secretary of State for Energy Security and Net Zero, Grant Shapps, ordered the CMA to create a voluntary scheme for retailers to share their fuel prices and monitor developments in the fuel market. The voluntary pricing scheme went live on 31st August 2023. PetrolPrices has been publishing prices from this scheme since the beginning of September, and we continue to work with retailers and the CMA. The report published on the 9th November is the first report by the CMA in its interim monitoring role.

The interim report found that while pump prices for both petrol and diesel have increased since May 2023, this can be divided into two separate periods.

During June, July and August, this appears to have been driven primarily by increased crude oil prices and, in the case of diesel, refining spreads, both of which are caused by global factors. Retail spreads were around the long-term average for petrol and below that level for diesel.

During September and October, the CMA observed significant increases in retail spread for both petrol and diesel. In both cases, the retail spread at the end of October was significantly above the long-term average. While the retail spread increases and decreases in response to volatility in wholesale prices, these spreads should begin to return to normal levels. If retail spreads were to remain at these levels for much longer, this would cause concern about the intensity of retail competition in the sector.

In other words, in September and October, wholesale costs fell while retail prices did not. The CMA noted that petrol prices had increased by 11 pence per litre and 13.9 ppl for diesel since May 2023. The difference between the average price drivers paid at the pump and the price retailers buy fuel was 17-18 ppl at the end of October. This was deemed a significant increase by the CMA.

The Petrol Retailers Association (PRA), which represents many independent fuel retailers, welcomed the report. Gordon Balmer, the Executive Director of the PRA, said, “With the volatility of the global fuel market, it is important that motorists are given the opportunity to search for the cheapest prices available to them. As always, I would encourage motorists to shop around to find the best deals possible.”

In an interview with the radio station LBC, Grant Shapps’s replacement at the Department for Energy Security and Net Zero, Claire Coutinho, said, “During the pandemic, we saw some quite frankly shocking behaviour from some petrol bosses, who were failing to pass on savings at the pump…we will not stand for this bad behaviour. That’s why I’m giving the Competition and Markets Authority new powers to force retailers, including supermarkets, to say how much they are charging customers. Those that fail to be transparent then could face serious financial penalites, including a fine of up to one per cent of worldwide turnover, or an ongoing fine of five per cent of daily turnover. Any retailer seen to be unfairly ramping up prices, will be held to account. Drivers deserve to know they are getting a fair deal at the fuel pumps and that is exactly what our plans will do.”

According to Coutinho, the new rules as part of a statutory rather than voluntary scheme will be incorporated into the Digital Markets Bill, which is part of the government’s legislative package during this parliament.

Update:
Watchdog to tackle rip off fuel prices

https://www.gov.uk/government/news/watchdog-to-tackle-rip-off-fuel-prices

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Find out what you need to know about ULEZ and other Clean Air Zones around the country.

In the first week of November, 2023, TfL reported that since the Ultra Low Emission Zone has been expanded to cover the whole of Greater London, roughly 60,000 vehicle drivers a day are paying the daily £12.50 fee to enter or move within the zone, worth approx £730,000 daily.

This comes despite recent research by Motorway, revealing that 52% of drivers felt they would not be able to afford the ULEZ charge. 

Is ULEZ affecting more or fewer London motorists than expected?

All year, there’s been speculation about how many vehicles will end up paying the daily charge, rather than benefiting from scrappage schemes (since expanded so all Londoners are eligible), or upgrading their vehicle to a compliant model. RAC reported in February of this year that approx 850,000 vehicles registered in Greater London were not compliant with the ULEZ restrictions.

In the first month that followed the expansion of ULEZ from Inner London to the whole of Greater London, nearly 50,000 fewer vehicles were on the road than in June, which accounts for about 2% of all traffic, suggesting that some non-compliant vehicle owners have changed their routine transport options from cars to public transport and other solutions.

How does ULEZ work?

Like all other Clean Air Zones across the UK, Greater London’s ULEZ uses cameras to read vehicle registrations. These are checked against the DVLA’s records, and the registered keepers of vehicles that are not compliant with the Euro 4 (petrol) and Euro 6 (diesel) standards are sent a Penalty Charge Notice (PCN) if they fail to register their trip within the zone with the local authority in the correct timeframe.

In Greater London, you have to register and pay £12.50 for your trip into or within the capital before the end of the third day after travelling, in order to avoid the £180 PCN. The penalties are halved when paid within thirty days (this varies from zone to zone, around the country), however if you have failed to keep your details updated with the DVLA, you may not receive your PCN until it has gone up in value, as these are sent in the post.

If your vehicle is compliant, you don’t have to do anything. If your vehicle is compliant due to a modification or other unexpected reason, it’s worth registering it with TfL in order to avoid surprise fines.

Anybody who regularly drives in the ULEZ or another CAZ may be able to set up an autopay with the responsible authority, in order to avoid unpaid charges developing into fines, and to avoid spending lots of time registering trips.

How have other charging emissions zones affected locals?

Greater London’s ULEZ is not the UK’s first emissions-reduction scheme to penalise fewer drivers than anticipated; this past summer, Glasgow’s LEZ also started targeting non-compliant drivers, although local residents have a grace period until next year.

In the first month of the scheme being implemented, over 100 drivers were issued with penalties each day. By the end of the second month, a reported £600,000 in fines had been issued – and all from non-residents in non-compliant vehicles. Like in the case of ULEZ, the revenue is used for projects that help to lower air pollution and bring cities closer to their climate targets.

The Glasgow LEZ does not offer a daily charge; rather, non-compliant drivers receive a Penalty Charge Notice worth £60, which is halved to £30 when paid within 14 days.

Birmingham’s Clean Air Zone, the first to start charging car drivers in the UK, only gets approximately 40% of fines paid each month. With 6% of the fines issued being written off, that still leaves a wide gap of uncollected moneys. Local authorities are responsible for the implementation of emissions regulations, including payments.

How to avoid paying the ULEZ daily charge?

If you drive a compliant vehicle, you can rest assured that you won’t get any surprise charges through your postbox. Similarly, if your vehicle is in a category that gives national exemption, you won’t have to worry (although you may have to register with various local authorities in order to avoid being sent erroneous fines).

Nationally-exempt vehicles

• Disabled tax class or disabled passenger tax class
• Some agricultural vehicles
• Registered historic vehicles (from before 1973)
• Military vehicles
• Ultra-low emission vehicles
• Vehicles retrofitted under the Clean Vehicle Retrofit Accreditation Scheme (CVRAS)
  

However, if you drive a non-compliant vehicle in or near a charging zone such as ULEZ, and want to make sure you can avoid paying daily charges, you have several options:

See if you are eligible for a local scrappage scheme
Have your vehicle retrofitted under the CVRAS
Avoid driving into the charging zones
Sell your vehicle to a verified dealer and buy a compliant one instead

If your non-compliant car isn’t worth much more than a scrap payment, it may be worth your while making use of a local scrappage scheme such as TfL’s one operating for all Greater Londoners, which pays out £2,000 for a non-compliant car.

If you are a business owner or charity with a non-compliant van, it may be even more in your interest to make use of a scrappage or retrofit scheme, as grants can be generous and cover the costs of adopting a compliant (and more modern) vehicle.

Retrofits for normal family cars are generally less cost-effective than the option to sell your car and use the funds to purchase a compliant model.

How to check compliance with ULEZ and other CAZs?

The UK’s charging zones largely have the same compliance criteria, which is Euro 4 engine rating for petrol engines and Euro 6 for diesel. The rating is assigned to the engine used in your car model, based on how many pollutants are emitted when you drive.

Since 2006, almost all petrol engines have been rated at least Euro 4 standard, and as for diesel, Euro 6 has been the norm since 2016. However, it’s key to double-check your compliance if you’re not sure on your engine’s Euro rating.

Emissions zones that charge cars in the UK are in Class D, along with Oxford’s ZEZ. Vans are additionally charged in Class C CAZs.

In the run up to the 2035 switchover, the safest way to avoid rising emission charges, changes to tax categories, and other running costs associated with fuel type, is to switch to a hybrid or electric vehicle.

How to sell a non-compliant car

If you’re thinking of selling your car or van due to its compliance status, look no further.

Motorway offers a simple – and completely free – way to sell your car for a great price, whatever the model and whatever the compliance status. If you’re looking to sell a non-compliant vehicle to avoid paying ULEZ or CAZ charges, it’s easy to sell on Motorway to a dealer from elsewhere in the country, where demand for non-compliant models may be higher.

Just enter your reg on the homepage and you’ll be provided with an instant estimated sale price based on up-to-the-minute market data. Motorway will then ask you a few easy questions about your vehicle and guide you through the profiling. If you choose to enter your car into an online daily sale, it’ll be shown to Motorway’s UK-wide network of more than 5,000 verified dealers who will compete to give you their best price.

In as little as 24 hours, you’ll receive your best offer – and, if you choose to go ahead with the sale, your car will be collected for free by the dealer and the money will be quickly and securely transferred to your bank account.

Unleaded is produced from crude oil, and as global crude oil prices fluctuate, this impacts the pump price. However, the unleaded product’s cost only makes up 36% of the price you pay at the pump. So, where do the extra costs come from?

Maybe unsurprisingly, it’s tax. The majority of the pump price is made up from two taxes. Fuel duty, which is currently set at 52.75 pence per litre (ppl) for unleaded petrol and diesel, and VAT, which is set at 20%. Fuel duty was reduced from 57.95ppl to its current value in March 2022, and this change was intended to reduce the cost of fuel to support households and businesses at a time of very high oil prices. Motorists also pay 20% VAT on top of the total cost of the fuel, including the fuel duty, which means that the 52.75ppl fuel duty is actually 63.3ppl at the pump. Over 54% of the price of unleaded and over 52% of the diesel cost at the pump is tax.

The unleaded that you put in your vehicle is a blend of crude oil derived fuel and ethanol, and in diesel, biodiesel is blended at up to 7%. The renewable part of the fuels makes up around 2% of the total cost.

There is also a cost to move the fuel from the refinery and terminals around the UK into the petrol stations. This is typically less than 1% of the total cost of fuel.

The remaining cost is the retailer’s margin, which is usually around 5-7% of the total cost of fuel.

Back in March 2023, diesel prices were over 20 pence per litre (ppl) more than unleaded. Prices for diesel fell sharply in May. This was just before the Competition and Market Authority (CMA) released its findings following an investigation into the retail fuel market.

In June and July, pump prices for diesel were around 2ppl more than that of unleaded. However, since the summer, the pump price of both diesel and unleaded has risen. September started with diesel being priced on average 3ppl over unleaded, and it finished at over six pence higher.

October has seen some slight price drops in unleaded, but diesel has been slower to decline, leading to it being sold at a premium of seven pence over unleaded.

Wholesale diesel prices have been trading over ten pence higher than unleaded during October and even as high as 15 pence. In part, this is the result of fuel supply cuts from Saudi Arabia and Russia, in particular diesel, into the European markets. The UK uses more diesel than it produces and so is reliant on imports. Whereas the UK produces more unleaded and so unleaded is less affected by these cuts.

Diesel margins appear to have increased a couple of pence since October but remain lower than at the start of the year. Unleaded margins, however, do appear higher than at any point earlier in the year.

As part of the CMA’s investigation into the fuel retail market, Asda was fined for “failing to provide relevant information in a timely manner.” In a later meeting with MPs, Asda confirmed their strategy was to be the most competitive supermarket. However, over the last three weeks, Asda has lost its competitive edge. Sainsbury’s is now the supermarket with the lowest priced unleaded.

Prices can vary significantly by region, with motorists in Greater London and Cheshire among those who can expect to pay the most. While drivers in Angus and Aberdeen can expect to pay the least.

The start of October saw a drop in crude oil prices, which in turn helped reduce the wholesale cost of diesel and unleaded. On 5th October, Brent Crude Oil dropped to $84 a barrel, but this has since risen back to $90. It wouldn’t be surprising to see this lead to rises in diesel prices at the pump once more.

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A study by Motorway, the used-car marketplace, reveals that 6.3 million Brits have accepted a bad deal when selling their car. Those accepting bad deals did so out of convenience, ultimately losing them money from the sale. What’s more, 3.5 million Brits regretted selling their car because the sale was poorly researched and did not achieve the best price possible.

Ease and convenience are often a key driver for any sale, with many car owners going directly to an instant buyer or their local dealer, or they’ll make a quick private sale transaction on a classified site. 7.8m Brits reveal they only go to one dealer when it’s time to sell, accepting one person’s opinion valuation and sale price.

Once on the forecourt, car owners often accept the first offer, with more than a third (37%) confirming they are intimidated by the haggling process altogether, putting them off getting the best price for their vehicle. More than a quarter (27%) of those surveyed said they lacked the negotiating skills to get the best price, whilst 23% revealed social anxieties were the reason they did not attempt to negotiate a higher figure.

Surprisingly, 41% of car owners don’t know how much their car is worth, which makes negotiating the best price nearly impossible.

Alex Buttle, Co-Founder of Motorway, which commissioned the research, said: “Selling your vehicle can be daunting for many, particularly if you don’t feel confident or knowledgeable about cars, but there is an easy and simple way to sell your car online. At Motorway, our dealer network matches each seller with the dealer willing to pay the most, in as little as 24 hours, for free. And with free home collection and fast payment, we take all the hassle out of selling for a great price.”

For an instant free car valuation, visit Motorway.co.uk.