British drivers continue to face inflated fuel costs due to “stubbornly high” margins, according to a recent report from the Competition and Markets Authority (CMA). The watchdog’s latest analysis reveals that fuel margins persist above historical levels, signalling ongoing concerns about weakened competition in the sector.
Data from the CMA shows supermarket fuel margins climbed from 7 per cent in April to 8.1 per cent in August, whilst non-supermarket margins saw an even steeper rise from 7.8 per cent to 10.2 per cent during the same period. The sustained elevation in fuel margins indicates a concerning trend in the road fuel retail market’s competitive landscape.
Dan Turnbull, senior director of markets at the CMA, emphasised that despite recent price reductions, motorists are still paying excessive amounts at the pump. The retail spread – the difference between pump prices and retailer purchase costs – remained significantly above the long-term average of 5p to 10p per litre, with petrol averaging 14.9p per litre and diesel at 16.3p per litre.
The RAC’s head of policy, Simon Williams, expressed disappointment at the findings, particularly following the CMA’s earlier revelation that drivers were overcharged by £1.6 billion in 2023. The organisation hopes the forthcoming government-backed fuel-finder scheme will stimulate greater competition and deliver fairer prices nationwide.
Labour has committed to implementing the fuel-finder scheme by the end of next year, alongside granting statutory monitoring powers to the competition regulator. The current voluntary price data-sharing scheme, established after the CMA’s initial 2022 report, covers only 40 per cent of UK retail fuel sites, highlighting the need for more comprehensive oversight.
Average petrol and diesel prices at October’s end stood at 134.4p and 139.7p per litre respectively, representing decreases of 10.0p and 10.4p, primarily driven by global factors including crude oil costs. However, the persistence of elevated retail spreads since 2020 continues to raise concerns about the sector’s competitive health.
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