The cost of living crisis over the last few years has meant the price we pay at the pump has become more than a routine expense—it’s a drain on hard-working families and a burden on small businesses. Dunfermline is a small city, with a population of around 60,000, but with a range of supermarket petrol stations like Asda and Tesco, along with other suppliers, that should keep prices down.
Despite this, however, petrol prices in Dunfermline are consistently 5p higher than similar sized places like Kirkcaldy and Glenrothes and as much as 12p higher than Aberdeen, over 100 miles further North and away from Scotland’s only oil refinery at Grangemouth. Prices being fixed in Dunfermline is nothing less than the actions of a cartel.
A recent investigation by the Competition and Markets Authority (CMA) revealed that broken competition in the fuel sector is costing drivers across the UK billions, all while further deepening the economic challenges many are facing.
In 2022 and 2023, UK drivers paid an estimated £2.5 billion more for fuel than they should have. This isn’t a result of natural fluctuations in fuel prices but, rather, the outcome of weakened competition among fuel retailers.
For drivers like my constituent Aimee, a young apprentice from Dunfermline who earns the apprentice minimum wage of £6.40 an hour, high fuel prices aren’t just an inconvenience—they’re an impediment to financial progress. Aimee spends £200 each month on fuel just to get to work, but if she lived in Aberdeen, 112 miles away, she’d spend £20 less each month. That’s a shocking difference, and it highlights just how much this broken market is costing individuals simply based on where they live.
Even more troubling is that many of the highest fuel prices are found in areas where people depend heavily on their vehicles. In rural and semi-rural areas, where public transport options are limited or unreliable, driving is often not a choice but a necessity. Yet, residents of these areas find themselves paying more at the pump. This disproportionately affects those who are least able to afford it and leaves people like Aimee facing a ‘location tax’ on top of the already rising costs of essentials.
This situation also stifles local economies, especially small businesses. The Federation of Small Businesses found that over three-quarters of businesses saw a rise in their operating costs in the last quarter, and fuel price increases are a major contributor. For independent businesses and tradespeople—plumbers, florists, builders, and delivery drivers—high fuel costs mean thinner profit margins and, in some cases, the inability to expand or invest.
Recent action taken by the Chancellor to freeze fuel duty in the Budget is welcome, but it’s only a temporary reprieve from high prices at the pump. Without addressing the root cause of price gouging by fuel retailers, drivers in places like Dunfermline and Dollar won’t feel the full benefit of government relief.
The government has accepted CMA recommendations to begin to tackle this issue including a “fuel finder” open data scheme to improve price transparency and a road fuels monitoring function to report on market competition.
These measures offer some promise, as real-time price sharing among fuel retailers could expose and prevent the local price clustering that has become all too common in places like Dunfermline, where petrol stations appear to uniformly set prices rather than compete. Greater transparency could allow consumers to make more informed choices, encouraging genuine competition rather than what seems more like a cartel.
But these initiatives should only be the start. Fuel retailers have the opportunity right now to act in good faith by stabilising prices and curbing local price-fixing. They can take the initiative to avoid regional disparities that financially penalise those in rural and semi-rural areas
Fuel is not a luxury; it’s a necessity. We cannot continue to allow this broken market to dictate prices that make it harder for individuals and small businesses to make ends meet. If retailers won’t act, then the government must continue to take concrete steps to hold them accountable. This isn’t about eliminating profit; it’s about eliminating profiteering.
The CMA’s proposals are a promising first step, but let’s be clear: they will only be successful if we see real changes at the pump. People like Aimee, who are working to build their future, shouldn’t have to pay more because they live in a particular postcode. Fuel pricing must be fair, transparent, and competitive to ensure that all drivers, regardless of where they live, get a fair deal.
It’s Time to End Regional Fuel Price Gouging and Protect Hard-Working Families
