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Petrol retailers threatened to pull out of a meeting with the UK chancellor on Friday afternoon in a dispute over ministers’ “inflammatory” portrayal of the industry, as prices surge amid the Iran war.
The Petrol Retailers Association said it would not attend the meeting at Number 11, claiming that staff had been abused by the public following ministers’ comments suggesting retailers were “price gouging” and “profiteering” from the energy market disruption.
It relented after discussions with the government and was due to attend the meeting, which was expected to be held shortly after 4pm.
In a statement, a spokesperson for the PRA said it had withdrawn from the meeting after “concerns that inflammatory language by government ministers was leading to incidents of retail staff being abused by members of the public”.
Gordon Balmer, the PRA’s executive director, later told the FT that he was “concerned that [the meeting] could be used to reiterate some of the statements that have been coming from some quarters around profiteering and ‘rip-offs’. We want the meeting to be held in the spirit of collaboration.”
The dispute highlights the tensions caused by the surge in oil prices as the near-closure of the Strait of Hormuz disrupts about 20 per cent of global oil supplies and ripples through the global economy.
The UK government has repeatedly pledged to cut the cost of living, but diesel has now risen by 15.9 pence and petrol by 7.5 pence since the outbreak of the war on February 28, according to RAC figures, leaving the government scrambling to respond.
Gas prices have surged as well, and market experts Cornwall Insight said on Friday that it expected Britain’s energy price cap for the typical household to rise to £1,827 per year in July for July to September, up from £1,641 set by Ofgem for April to June. The cap limits how much energy suppliers can charge for standard variable tariffs.
Executives from major household electricity and gas suppliers are also expected to attend Friday’s Number 11 meeting and be questioned over how they are coping with the surge in gas prices caused by disruption to Middle Eastern supplies.
Ministers have repeatedly suggested petrol retailers are at fault for surging petrol prices. Prime Minister Sir Keir Starmer warned on Friday that the government would step in if fuel companies tried to “rip off” customers, while Ed Miliband, the energy secretary, told the BBC Breakfast television programme the government would not tolerate “price gouging”.
Balmer said earlier this week that the government did not appear to be taking into account different retailers’ arrangements with their own suppliers, suggesting it did not understand how the market worked.
EdgePetrol, which provides pricing software for independent retailers, said its data showed that average gross margins on fuel minus fuel card fees had fallen slightly since the conflict, down 0.5 per cent on average to 7.6 per cent compared with the three weeks before.
Ahead of Friday’s meeting, the UK chancellor Rachel Reeves said she would ask the industry to explain why prices varied so widely and what steps petrol stations would take to shield consumers from paying “over the odds”.