U.K. Transport Secretary Considers Forcing Lower Petrol Prices

The secretary said that retailers are not passing on wholesale price slashes on fuel to customers.

June 04, 2012

LONDON - The U.K. Department for Transport could make petroleum retailers pass along any savings on wholesale fuel prices to consumers, BBC News reports. Transport Secretary Justine Greening said she??s considering the move because although gasoline prices have dropped by 7p since April, the wholesale price has dipped 10p.

She said wanted to make sure drivers "get a better deal." Petroleum retailers countered that it shows a "lack of understanding" of the industry. Pump prices have decreased since March??s record levels of more than ?1.40 a liter.

Wholesale fuel costs in northern Europe have plummeted more than 16% last month, but motorists haven??t seen a corresponding drop at the pump. The Transport Department said the industry needs to devise voluntary conduct codes to make sure wholesale price dips make it to the retail level within a 14 days.

Greening supports voluntary action but said the government would take charge if that didn??t happen quickly enough. "That's what we're going to look at first, but if that doesn't work we will look at some of the things other countries have done like Germany, Austria and Denmark, who have taken more mandatory action in this area. I'm really determined that motorists get a better deal," she said.

Brian Madderson, petrol division chairman of the Retail Motor Industry Federation, said those remarks showed how little the government understood the industry. "Suggestions that the falling price of oil and wholesale price movements on the continent should dictate further pump price cuts across the UK by independent forecourt operators is damaging to this struggling sector and shows lack of any real understanding of fuel price mechanisms," he said.

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