The Competition and Consumer Protection Commission (CCPC) has today (Tuesday, November 22) published the results of in-depth analysis of the retail motor-fuel market relating to excise duty cuts, during March 2022.
The CCPC received over 200 complaints by consumers who were impacted by significant increases in fuel prices at the pump.
There was also strong media and political commentary at the time, against an international backdrop of price increases in energy, the war in Ukraine and high inflation.
As part of its competition and consumer protection remit, the CCPC conducted research, market surveillance and premises inspections. The aim of the analysis was to examine claims of lack of competition or pricing irregularities in the sector.
Report on fuel excise duty cuts
The CCPC received detailed pricing information relating to 50% of the service stations in the state.
The research shows that increased international prices were behind price increases for consumers in the period leading up to the government’s excise cut, rather than stations illegally coordinating their prices or a lack of competition.
Speaking on the report, chairperson of the CCPC Jeremy Godfrey said: “The analysis shows that there was effective price competition between petrol stations in all counties in the state.
“Changes in the price of fuel at the pump were largely driven by changes in the wholesale price that petrol station operators had to pay for their supplies.
“Following the excise duty cut, the difference between pump price and the wholesale price generally remained within the normal range for the industry.
“However, pump prices did not immediately fall on the day the excise duty cut came into effect and it is understandable that consumers were concerned about this,” he added.
The CCPC analysis found the main reason was that it took time before petrol stations received supplies of fuel that had been taxed at the lower rate.
The delay varied from station to station because of differences in stock levels and differences in the supply arrangements between fuel stations and their suppliers.
Also, the analysis indicates that the pump price was affected by volatility in the underlying cost of fuel, which made it difficult to isolate the impact of the excise duty cut.
“The experience of an excise duty cut taking time to work through to pump prices is also observed in other markets internationally. We recommend that policymakers take this into account when communicating with consumers about the likely impact of comparable changes in the future,” Godfrey continued.
Overall, the analysis suggests the excise cut was largely passed onto consumers, although not instantly.
The data implied no evidence of coordinated pricing behaviour during the period of analysis amongst the fuel stations examined.
The analysis of volumes sold by brands indicates that consumers shopped around and this was made possible by a high level of compliance with the price display regulations as observed by the CCPC.