Competition from filling stations in the Republic is keeping the cost of petrol and diesel in the north lower than in other parts of the UK, a new report has found.
The UK's Competition and Markets Authority (CMA) has found that prices at forecourts across the UK are higher than they should be as a result of weakened competition between retailers and the prominence of supermarkets selling fuel.
However, the CMA road fuel supply study found that drivers in Northern Ireland were benefitting from competition from service stations across the border.
"The fact that we observe prices that are significantly lower in Northern Ireland is likely due to the fact that filling stations there are competing with filling stations across the Irish border, which are subject to a range of different competitive and fiscal dynamics," the report said.
Unleaded petrol is on average 2.8p cheaper per litre in Northern Ireland than in London, while diesel is around 1.4p cheaper.
As a result of the report, the CMA has made recommendations for the UK market to help ease costs for motorists.
Read more: CMA to investigate possible ‘weakening of competition' in food and fuel prices
The watchdog has said a new fuel finder scheme that can be accessed on mobile phones would help revitalise competition across the UK and ultimately lead to overall lower prices at pumps.
Compulsory open data requirements would ensure the scheme's success, the CMA said, along with a new ‘fuel monitor’ oversight body.
"The fuel finder open data scheme would need statutory backing through legislation to ensure fuel retailers provide up-to-date pricing and make that available to drivers in an open and accessible format that can be easily used by third party apps such as satnavs or map apps, through a dedicated fuel finder app, or a combination of both," a CMA spokesperson said.
"The fuel monitor would monitor prices and margins on an ongoing basis and recommend further action if competition continues to weaken in the market."
The report established that through greater transparency for motorists, up to £4.50 per tank filling could be saved by shopping around locally.
UK energy secretary Grant Shapps said: "We'll shine a light on rip-off retailers to drive down prices and make sure they're held to account by putting into law new powers to increase transparency."
