Conservative MP Robert Halfon who has led a campaign calling for a full investigation into alleged cartels and market manipulation in the oil market for the past three years, said:
Last year, in a debate that I pressed for, Parliament voted unanimously for an investigation into the oil market.
These latest allegations underline why that must happen urgently in the UK.
High oil prices are crushing families across Britain. Motorists are being taken for a very expensive ride.
The Government has done its bit, by freezing fuel duty for three years. Now oil companies must come clean and show some responsibility for what is happening to the international oil price.
Mr Halfon told BBC Radio 4's Today programme anyone found guilty of price fixing should face jail and oil firms should expect hefty fines:
Clearly there has been a problem, there needs to be a full inquiry.
The Government needs to say, anyone caught doing this, there should be prison for price fixing and there should be huge multimillion-pound fines on any oil company found guilty and that money should be passed back to the motorist.
The sharp rises in fuel and oil prices we've seen recently have raised huge concerns about what is really driving them.
The oil market isn't transparent or accountable enough. There is an urgent need for a powerful and independent watchdog to ensure that there's no market manipulation and that UK families and businesses pay a fair price for their fuel.
The European Commission said in a statement that even small distortions of assessed prices could have a "huge impact on the prices of crude oil, refined oil products and biofuels purchases and sales, potentially harming final consumers".
The European Commission can confirm that, on 14 May 2013, Commission officials carried out unannounced inspections at the premises of several companies active in and providing services to the crude oil, refined oil products and biofuels sectors.
The Commission has concerns that the companies may have colluded in reporting distorted prices to a Price Reporting Agency to manipulate the published prices for a number of oil and biofuel products.
Furthermore, the Commission has concerns that the companies may have prevented others from participating in the price assessment process, with a view to distorting published prices.
Any such behaviour, if established, may amount to violations of European antitrust rules that prohibit cartels and restrictive business practices and abuses of a dominant market position (Articles 101 and 102 of the Treaty on the Functioning of the EU and Articles 53 and 54 of the EEA Agreement).
RAC technical director David Bizley said the oil price fixing allegations were "worrying news for motorists" who are already suffering due to the high cost of keeping a vehicle.
He added: "The Office of Fair Trading inquiry concluded at the end of January that the UK fuel market was operating fairly and not against the best interests of motorists, and therefore that a Competition Commission investigation was not needed.
"Motorists will be very interested to see what comes of these raids. Whatever happens the RAC will continue to campaign for greater transparency in the UK fuel market and for a further reduction in fuel duty to stimulate economic growth."