Fuel profit margins still persistently high, says watchdog
Motorists may be paying more than they should for petrol and diesel after Britain’s competition watchdog said fuel profit margins remain at “persistently high levels” despite falling prices at the pump.
The Competition and Markets Authority (CMA) also disputed retailers’ claims that this was a result of higher operating costs.
The CMA said in its first annual road fuel monitoring report that competition in the sector was “weak”.
The report was published as the government prepares to launch a “fuel finder” program that will allow drivers to compare fuel prices in real time.
Last week gasoline was 136.8 pence per litre. government monitoringDiesel was 146.1 pence per litre.
CMA report It found that fuel prices have fallen “significantly” since 2023, when it last studied the issue, largely due to lower oil prices.
However, it said profit margins on fuel for both supermarket and non-supermarket retailers were “historically high”.
“Average fuel margins on a percentage basis for both supermarket and non-supermarket retailers have continued to increase,” he said.
The report noted fuel retailers’ claims that operating costs were increasing, but if this were the case “we would expect to see this reflected in reduced profit margins”.
The CMA said drivers would see better fuel prices at the pump if there was more competition.
Retailers will have to register in the system planned Fuel finding scheme and reporting price changes within 30 minutes of implementation.
The finder will be accessible via apps and satnavs and will allow drivers to easily compare prices, the CMA said.
“This will encourage retailers to compete harder for customers, putting downward pressure on prices.”
Dan Turnbull, senior market director at the CMA, said: “Fuel margins remain at consistently high levels and our new analysis shows that operating costs do not explain this.
“We know fuel costs are a big issue for drivers, especially as millions of people travel across the country.”
Both the RAC and the AA said drivers were being overcharged for fuel.
The wholesale price of petrol has fallen by more than 7p per liter since November, but the average petrol pump price has fallen by just two-thirds, the AA said.
“This comes at a time when millions of motorists are hitting the road for Christmas and are being overcharged for their fuel,” the motoring body said.
“As the CMA clearly shows, drivers are being taken to the pumps.”
RAC head of policy Simon Williams said: “Many motorists won’t be surprised to hear they’re still paying too much for their fuel, especially given the complaints we’ve received about huge price differences from location to location.”
He said retailers’ claims about higher operating costs were “now clearly rejected” by the CMA.
“We sincerely hope that the new fuel discovery scheme, combined with the CMA’s ongoing review, will lead to increased competition and lower forecourt prices for motorists across the country.”
