People in rural Britain pay more for fuel than people in cities, putting pressure on the cost of living, a competition watchdog has said.
Fuel is on average 1.2p a liter more expensive in rural areas, the Competition and Markets Authority said.
Additionally, the CMA said it found some evidence of “rocket and feather” prices in 2022.
This is when fuel prices are rising fast but falling slowly.
Rural fuel prices are consistently higher than urban prices, the CMA said in a report.
The differences in fuel prices require further investigation, it said.
“There are significant price differences between many rural and urban areas,” it said.
People living in rural areas tend to be much more dependent on cars than people living in cities.
On average, they pay more for petrol and diesel than city dwellers.
Depending on where people buy fuel, there can be a cost difference of around 4p per liter between local urban and rural petrol stations.
In general, gas stations with the highest prices have fewer competitors, which raises some competition concerns.
However, rural gas stations face higher costs as they sell less fuel than urban gas stations and higher transportation costs.
Also, the higher prices could allow rural gas stations to stay afloat in sparsely populated areas – if they were to close it would be a problem for local drivers, the CMA added.
While rural prices are higher than urban prices, motorway service station prices are much higher than both.
The watchdog is also concerned that fuel prices rise quickly when wholesale costs rise, but fall much more slowly than those costs when they fall again.
It found evidence of this practice across retailers in 2022, particularly diesel prices, and some evidence that it was leading to higher profits.
However, she said she needed to investigate this more thoroughly to be able to say for sure if this happened.
The price of fuel has skyrocketed due to factors such as the Russian invasion of Ukraine, which has further pushed up the price of diesel. Most diesel in north-west Europe traditionally comes from Russia.
Refiners have charged more for wholesale fuel relative to the cost of crude oil and the pound has been weaker against the dollar, which has also pushed prices higher.
Crude oil is priced in dollars, so a weaker pound makes it relatively more expensive to buy in the UK.
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