Pressure is mounting on Britain's big supermarkets to cut their fuel prices.
UK Business Secretary Grant Shapps yesterday threatened the country's fuel retailers with state intervention unless they give drivers a fair deal on prices at the pumps this Christmas.
He has demanded that they come clean on their pricing formula after the release of RAC data this week showed record high prices this festive season in spite of the lower oil price and a 5p cut in fuel duty.
Mr Shapps said that the government was "committed to ensuring retailers are offering a fair deal at their forecourts" and "will not hesitate to act to ensure competition is healthy and consumers get a fair deal on their fuel".
UK drivers are currently being hit by record Christmas fuel prices, with big supermarket chains being blamed.
Earlier this month saw the publication of the Competition and Markets Authority's initial update report on its market study into the supply of road fuel in the UK.
Fuel margins
Mr Shapps yesterday told fuel retailers: "It is concerning to see that the CMA's emerging findings point to retail fuel margins rising year on year over the past five years ahead of general inflation.
"In addition, its analysis has found evidence that, on occasion, the price of fuel at the pump has fallen more slowly than it rises following changes in the price of crude oil.
"As a result, the CMA will continue to investigate the retail sector further, with a focus on the relationship between wholesale and retail fuel prices, factors driving local and regional variations in prices, and the role played by major supermarkets in the road-fuel retail sector.
"The pressure on consumers, particularly during the festive period, is greater than it has been for a very long time.
"You will have seen recent reports in the media suggesting retailers, particularly supermarkets, are not passing on wholesale savings to motorists swiftly enough.
"This government is committed to ensuring retailers are offering a fair deal at their forecourts. I therefore welcome the focus the CMA will be placing on the role of retailers and urge you all to engage fully, openly and transparently with the CMA to explain changes in pricing behaviour.
Remedial action
"I will be looking very closely at the CMA's conclusions, in particular any recommendations they make regarding remedial action in the sector.
"Ahead of this, I encourage you to take any steps necessary to ensure savings are passed on to consumers. This government will not hesitate to act to ensure competition is healthy and consumers get a fair deal on their fuel.
The RAC said consumers were being "heartlessly overcharged" as the average price per litre of petrol stands at around 153p, with diesel at 176p.
Compared with the days leading up to last Christmas - previously the most expensive period on record for drivers - current prices are 7p higher for petrol and 27p more for diesel.
The RAC claims that drivers should not be feeling this much pain at the pumps, given that the wholesale price of petrol is the same as 12 months ago while diesel is just 14p more per litre.
The organisation also notes that the government's 5p-per-litre cut in fuel duty introduced in March remains in place, and believes that the average prices per litre of petrol and diesel should be cut by around 15p and 13p respectively.
RAC fuel spokesman Simon Williams said: "The Big Four supermarkets, which dominate UK fuel retailing, have robustly refused to significantly lower their forecourt prices to reflect what's happened with the substantial reduction in the price of wholesale fuel that they are enjoying."