CMA inquiry into fuel market unnecessary, says IEA energy analyst
13 June 2022
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Commenting on the Competition and Markets Authority’s (CMA) inquiry into the fuel market, Andy Mayer, Energy Analyst at free market think tank the Institute of Economic Affairs, said:
“No inquiry is needed. Government policy accounts for more than ten times* as much of the cost of fuel than retailer margins. Most of these costs could be reduced tomorrow through tax cuts and deregulation. “The inquiry will also find nothing new. There are over 8,000 fuel stations in Britain. It is self-evidently a competitive market, and could be more so by removing restrictions to competition, like motorway service licensing.“The answer to high prices today is lower fuel duty. The answer to local differences is to build a rival, not more regulation. And the answer to lower long-term prices is more domestic production, not windfall taxes, banning onshore drilling, and dependency on imports.”
ENDSNotes to editors
Contact: media@iea.org.uk / 07763 365 520
IEA spokespeople are available for interview and further comment.* RAC fuel price breakdown https://www.rac.co.uk/drive/advice/fuel-watch/Retail fuel profits account for between the 2-4% (RAC) of each tank. Whereas, 45-46% are taxes and 7-10% from the biofuel mandate. Their anti-drilling stance and high fossil fuel extraction taxes add further hidden costs to the remaining 40-45% wholesale costs.
“No inquiry is needed. Government policy accounts for more than ten times* as much of the cost of fuel than retailer margins. Most of these costs could be reduced tomorrow through tax cuts and deregulation. “The inquiry will also find nothing new. There are over 8,000 fuel stations in Britain. It is self-evidently a competitive market, and could be more so by removing restrictions to competition, like motorway service licensing.“The answer to high prices today is lower fuel duty. The answer to local differences is to build a rival, not more regulation. And the answer to lower long-term prices is more domestic production, not windfall taxes, banning onshore drilling, and dependency on imports.”
ENDSNotes to editors
Contact: media@iea.org.uk / 07763 365 520
IEA spokespeople are available for interview and further comment.* RAC fuel price breakdown https://www.rac.co.uk/drive/advice/fuel-watch/Retail fuel profits account for between the 2-4% (RAC) of each tank. Whereas, 45-46% are taxes and 7-10% from the biofuel mandate. Their anti-drilling stance and high fossil fuel extraction taxes add further hidden costs to the remaining 40-45% wholesale costs.
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