Government's relaxation of competition rules could drive up fuel prices
This means oil companies can openly communicate and target stations running low on fuel
Last updated 27th Sep 2021
The Government's relaxation of competition laws could drive up fuel prices for consumers.
That's according to Andreas Stephan, Professor of Competition Law at the University of East Anglia.
The temporary suspension of competition law from the Government, now allows the oil companies to freely exchange commercially sensitive information and coordinate supplies.
He told us that this decision is a "really odd one" and ultimately fails to fix the serious supply-chain issues causing shortages.
"It's a structural problem, suspending competition laws isn't going to magic up more lorry drivers".
"Competition law keeps prices low by ensuring competing businesses set prices independently of each other, so as to win customers’ business through rivalry".
He went on to say that this decision will only have a "limited effect on supply" and will likely result in local competition on petrol prices being eliminated altogether.
"Oil companies might decide to just keep one petrol station open in each town so that's its easier to make sure each area has fuel".
"But that means people have no choice over whether they can buy petrol from and the station there can then set the price as high as they like, with no consequences".
He concluded by telling us that there "is no guarantee that competition will return when the crisis is over."
"The current trading of commercially sensitive information means companies could learn how to compete less and charge more, in the future."