(Bloomberg) -- The UK’s antitrust watchdog said it will investigate widening retail fuel margins in what it called the “most volatile year for fuel prices since reliable records began.” 

The Competition and Markets Authority said Tuesday that annual retailer fuel margins, the difference between what retailers pay for fuel and the pump price, rose by 2 pence to 3 pence a liter on diesel and 3 pence to 4 pence a liter on petrol between 2017 and 2021, according to the interim findings in its market study. The agency said the this could be caused by cost rises to retailers or competition issues and it will be probing it further.

Petrol prices are at an all time high across the world, in part because of a refining bottleneck but also in the wake of Russia’s invasion of Ukraine and the disruption it caused across oil markets. The CMA has been tasked by the government with making sure the market is working for consumers. 

UK Antitrust Watchdog Begins In-Depth Probe On Petrol Prices

“It has been a terrible year for drivers, with filling up a vehicle now a moment of dread for many,” said Sarah Cardell, interim chief executive officer at the CMA. “The disruption of imports from Russia means that diesel drivers, in particular, are paying a substantial premium because of the invasion of Ukraine. A weaker pound is contributing to higher prices across the board too.”

The regulator launched its probe in July this year after an urgent review ordered by the government found a range of concerns. The refining spread -- a growing gap between the cost of crude oil and wholesale petrol and diesel -- was said to be causing the biggest trouble after it ballooned following Covid refinery closures. The CMA will publish the full report in the summer of 2023. 

In its latest update, the CMA emphasized that refining problems were not down to competition problems but largely influenced by global supply and demand. Elsewhere, it flagged that prices vary widely between local UK areas and that it will be scrutinizing the reason behind these differences. 

The cost of living crisis, being exacerbated by high petrol prices, has been an issue at the top of the competition agency’s priorities. The CMA has warned of dire consequences if any business is seen to take advantage of the situation by illegally colluding to raise prices.

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