Rachel Reeves has warned petrol retailers she will not tolerate drivers being ripped off as fuel prices surge following the Middle East crisis.
The Chancellor said she would hold urgent talks with forecourt operators this week after some garages were found charging as much as 180p a litre, while others were selling fuel for less than 130p.
She told MPs the Government is monitoring prices closely and has asked the competition watchdog to keep a close eye on the market amid fears motorists could be exploited.
It comes amid mounting concern that petrol stations are using the spike in global oil prices to unfairly push up profit margins – a practice that has previously cost drivers dearly.
Drivers have taken to social media to blast recent increases in petrol and diesel that will have been bought before the war in the Middle East led to a surge in the cost of crude oil.
Updating the House of Commons, Rachel Reeves said she would take action if retailers tried to profit unfairly from the crisis.
She said: “Yesterday, some petrol retailers charged almost 180p per litre, while others were charging less than 130p per litre. This government will not tolerate price gouging, and I will be meeting with petrol retailers this week to raise concerns and to get prices down at the pumps.”
The Chancellor also warned that companies that fail to share pricing data with the Government’s new fuel price monitoring scheme, which is designed to help drivers find the cheapest fuel in their area, could be publicly called out.
She said she would “not hesitate to call out retailers who fail to provide data to the Fuel Finder.”
The scheme is designed to allow drivers to compare petrol and diesel prices in real time. While around 90% of forecourts have signed up, far fewer are currently providing live price updates.
The Chancellor said she had also instructed the CMA to keep a close watch on the situation as tensions in the Middle East push oil prices higher.
She told MPs: “I have also asked the Competition and Markets Authority to be vigilant across prices, including essentials like road fuel and heating oil. Let me be absolutely clear. I will not tolerate any company exploiting the current crisis to make excess profits at consumers’ expense.”
The warning came after Reeves joined fellow G7 finance ministers in agreeing to stand ready to act if necessary to support global oil supplies.
Despite the turmoil, she insisted households would still benefit from the expected fall in energy bills next month.
Ms Reeves reassured MPs that Britain’s energy price cap will fall in April as planned, despite the latest geopolitical tensions.
RAC head of policy Simon Williams said: “Drivers are continuing to feel the financial impact of the current conflict, with the average cost of unleaded up another penny in the last 24 hours to 139p a litre. But it’s those that depend on diesel who are really bearing the brunt, with the fuel up another 2p to 155.1p. Diesel has now increased by nearly 13p, or 9%, since February 28, and is at its highest price since May 2024.
“If oil were to settle at around the $90 a barrel mark and the pound were to maintain its current position against the US dollar, drivers in the UK could expect average petrol prices to reach around 140p a litre, and diesel around 167p a litre. We urge drivers to shop around and make use of free apps such as myRAC to ensure they never pay any more for fuel than they need to.”
The Chancellor’s intervention is the second time she has clashed publicly with the petrol retail industry.
The Petrol Retailers Association (PRA) has consistently argued that the higher margins identified by the CMA does not mean retailers are profiteering. Instead, it insists they relate to higher costs of doing business.
The organisation has joined calls for the Chancellor to call off increases in fuel duty that are due to come into effect later this year in order to offer some relief to drivers.
It has written to the Chancellor asking which forecourt operators she intends to meet, as the industry body is not aware of any such appointments.
Gordon Balmer, Executive Director of the PRA, said: “The conflict in the Middle East has increased the wholesale cost of petrol and diesel, which will mean pump prices will have to go up. Rising fuel prices hurt the economy in the form of higher inflation, impacting already hard-pressed household budgets. To help motorists and businesses, I am today writing to the Chancellor urging her to abandon the planned fuel duty increases.”