Supermarkets and other fuel retailers will be forced to publish live prices under a new scheme aimed at stopping them overcharging, the government says.
It comes after Britons were found to have paid an extra 6p per litre for fuel at supermarkets last year as weak competition let them charge more.
Under the scheme drivers will be able to compare up-to-date prices online so they can find the cheapest option.
Driving groups say the idea, which is used elsewhere in Europe, is overdue.
Energy Security Secretary Grant Shapps said it would change the law to force retailers to share this information.
A new "fuel monitor" oversight body will also be set up to scrutinise prices on an ongoing basis.
"We'll shine a light on rip-off retailers to drive down prices and make sure they're held to account by putting into law new powers to increase transparency," Mr Shapps said.
Petrol and diesel prices spiked to record highs in the immediate aftermath of Russia's invasion of Ukraine but have dropped significantly since then.
The Competition and Markets Authority (CMA) has been investigating the UK fuel market following concerns that falling wholesale prices are not being passed on to consumers.
According to the watchdog, supermarkets were usually the cheapest place for fuel but competition was "not working as well as it should be".
It found that:
- average annual supermarket margins on fuel had increased by 6p per litre between 2019 and 2022 - equivalent to £900m in extra costs for drivers
- Morrisons' and Asda's targeted fuel margins for 2023 had doubled and tripled respectively since 2019
- Sainsbury's and Tesco had followed suit and raised their prices, suggesting competition had "weakened"
- increased margins on diesel across all retailers had cost drivers an extra 13p per litre from January 2023 to the end of May 2023
CMA boss Sarah Cardell told the BBC: "We've seen retail margins increase over the last few years. And that means that motorists are paying more at the pump than they would be if competition was working really well."
The RAC's spokesman, Simon Williams, said the extra costs for consumers were "nothing short of astounding in a cost-of-living crisis and confirms what we've been saying for many years that supermarkets haven't been treating drivers fairly at the pumps".
Asda - which was separately fined £60,000 by the CMA for failing to provide information in a timely manner to the investigation - said it was still the cheapest traditional supermarket for fuel.
Morrisons said its pricing was "extremely competitive", while Tesco said it was committed to providing "great value".
All of them have welcomed the idea of a price transparency scheme, of which a successful example is already in place and said to be lowering prices in Northern Ireland.
'Rip-off retailers'
The government said that under its new initiative, drivers would be able to access live, station-by-station fuel prices on their phones or satnavs.
At present, retailers only provide price information at petrol stations themselves, making it hard to compare rates, although some websites try to collate this data.
The AA said it had been calling for this type of price tracking since at least 2012, when it first investigated similar schemes in Austria and Denmark.
"Sadly, it has taken more than 15 years for a government and competition watchdog to recognise this and do something about it," said spokesman Luke Bodset.
Nevertheless, he said access to live pricing would be a "huge leap forward" and needs to be in place by the end of the year.
"Drivers will be drawn to the cheaper fuel stations and that will pressure other forecourts to bring down their prices, thus stimulating the level of competition that has been missing for the past three years."
As of Monday, unleaded petrol costs on average 143.86p per litre while diesel costs 145.54p, according to RAC data.
That is down sharply from the record highs seen last July, but still above pre-pandemic trends.
The CMA is also investigating complaints that supermarkets are not passing on falling food prices to consumers.
It comes as food price inflation on items like bread, cereal and chocolate remains close to a 45-year high, at 18.3%.
Supermarkets deny profiteering, telling MPs last week the industry is "the most competitive we have ever been".
How to save money on petrol and diesel
- Watch your speed: The RAC says 45-50mph is the most efficient speed to drive for fuel efficiency
- Switch off the air conditioning: Extra energy is needed to power a car's air conditioning system and turning it on can increase your fuel consumption by up to 10%, according to the AA
- Check your tyre pressure: Underinflated tyres will use up extra petrol. Check your pressures regularly, especially before heading off on a long journey
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https://news.google.com/rss/articles/CBMiLGh0dHBzOi8vd3d3LmJiYy5jby51ay9uZXdzL2J1c2luZXNzLTY2MDg1MjMy0gEwaHR0cHM6Ly93d3cuYmJjLmNvLnVrL25ld3MvYnVzaW5lc3MtNjYwODUyMzIuYW1w?oc=5
2023-07-03 16:35:20Z
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