The PRA has slammed a proposal by a group of MPs for an independent fuel price watchdog – to be called Pumpwatch – to monitor the cost of petrol and diesel.

The All-Party Parliamentary Group (APPG) for Fair Fuel suggested petrol stations that charge “fair prices” would be entitled to display a kitemark logo.

The proposal to set up Pumpwatch follows a petition organised by pressure group FairFuel UK. It has collected 14,000 signatures since the week before Christmas.

PRA chairman Brian Madderson described the proposal as “totally impracticable and nonsensical”.

He said: “It is not the first time a ‘Pumpwatch’ supervisory body has been called for by this lobbying organisation and the APPG for Fair Fuel. PRA regards it as unnecessary.

“The proper body to look into unfair pricing of retail fuel would be the Competition and Markets Authority. It has no plans to launch a new inquiry as its previous inquiry found no evidence to support anti-competitive pricing allegations.”

Madderson pointed out the diversity of the forecourt sector, with volumes for independent dealers ranging from 250,000 litres per day down to 250,000 litres per year, explaining: “Thus their financial targets by fuel margin also vary widely although they all have the common objective of financial sustainability.”

He added: “No Government body or quango should be in a position to enforce control of fuel margins across such disparate businesses as this would undermine free market principles

“If a motorist does not like the price at any particular filling station, he or she has plenty of other price options – thanks to the free market which should continue without interference.”

Fuel price campaigners argue that while pump prices have fallen over the last six months, they have not fallen as fast as wholesale costs.

Conservative MP Kirstene Hair, who is chair of the APPG, said: “Drivers need reassurance that they are not paying way over the odds for fuel.

“In rural communities where public transport is poor and unreliable, people need their vehicles to get from A to B. It is essential that they pay the fairest price. That is where a price monitoring system would support them.”

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