Petrol retailers will be working with the country's competition watchdog to come up with a scheme to allow motorists to compare live fuel prices online and find the best deals.
Supermarkets and major suppliers met Energy Secretary Grant Shapps on Monday (17) after the regulator claimed that drivers were overcharged due to weak competition. It found annual supermarket margins on fuel had increased by 6p per litre between 2019 and 2022.
Shapps met with bosses from Asda, Tesco, Morrisons, Sainsbury's and other major fuel retailers to "call time on their inexcusable behaviour of over-charging drivers".
"Today's commitment to a more transparent market is a step in the right direction," he said. "But I'm warning those who fail to put words into actions and continue to rip off motorists - you will be held to account."
The Competition and Markets Authority's (CMA) voluntary scheme will see retailers share up-to-date fuel prices before the new law forces companies to publish live data. The aim is to drive down prices and boost competition, allowing customers to find the "best deals locally", he added.
The government also wants the pricing data to be available to third parties like navigation map apps.
It plans to consult on the scheme this autumn ahead of new laws being introduced. The CMA has also recommended that there is a "fuel monitor" body to oversee the scheme. It comes after the CMA investigated the UK fuel market earlier this year following concerns falling wholesale prices were not being passed on to consumers.
Petrol and diesel prices have dropped since last summer when diesel motorists were paying close to £2 a litre. The CMA found average annual supermarket margins on fuel had increased by 6p per litre between 2019 and 2022 - equivalent to £900 million in extra costs for drivers.
RAC fuel spokesperson Simon Williams has called for an official wholesale fuel price monitoring function which has the power to fine or take action against major retailers who don't lower their forecourt prices when wholesale costs drop significantly.
"While the CMA recommended an element of monitoring wholesale prices in its report in UK fuel retailing, the RAC fears without the threat of consequence in the form of fines, the biggest retailers are unlikely to lower their pump prices quickly enough when the wholesale market trends down," BBC quoted Williams as saying.
