Drivers still paying too much for fuel, says competition watchdog

Motorists are still being hit with higher fuel costs than necessary due to "stubbornly high" margins, according to the competition watchdog.

The Competition and Markets Authority (CMA) has expressed concern over the sustained elevation in fuel margins beyond historical averages, indicating a potential weakening of competition within the sector. Figures released by the CMA show that supermarket fuel margins climbed from 7% in April to 8.1% in August, while margins at non-supermarket outlets increased from 7.8% to 10.2% over the same period.

Dan Turnbull, senior director of markets at the CMA, said: "While fuel prices have fallen since July, drivers are paying more for fuel than they should be as they continue to be squeezed by stubbornly high fuel margins."

At the end of October, the average petrol and diesel prices were 134.4 and 139.7 pence per litre (ppl) respectively, marking a decrease of 10.0 ppl and 10.4 ppl. The Competition and Markets Authority (CMA) also examined the retail spread - the average price drivers pay at the pump compared to the benchmarked price that retailers purchase fuel at - from July to October.

It discovered that retail spreads were above the long-term average of 5-10 ppl, with petrol averaging 14.9 ppl and diesel around 16.3 ppl. The CMA noted that retail spreads have remained above long-term averages since 2020, suggesting a persistent lack of competition in the sector.