The Competition and Markets Authority (CMA) has raised concerns over persistently high fuel margins, revealing that UK motorists still pay more at the pump than necessary. Despite falling fuel prices since July, a lack of competition in the retail sector is leaving drivers out of pocket, according to the CMA’s interim monitoring report published on 28th November 2024.
Fuel Margins Remain High
According to the CMA figures, retailer fuel margins – the difference between the price they pay for fuel and what they charge customers – have remained above historical levels. Supermarket margins rose from 7.0% in April to 8.1% in August, while non-supermarket margins climbed even higher, from 7.8% to 10.2%. These figures suggest weakened competition, keeping pump prices elevated despite decreases in wholesale costs.
Falling Prices, But Not Enough
Between June and October 2024, average fuel prices dropped by 10 pence per litre (ppl) for petrol and 10.4ppl for diesel. By the end of October, drivers were paying 134.4ppl for petrol and 139.7ppl for diesel. However, retail spreads – the difference between wholesale costs and pump prices – remain well above the typical range of 5–10ppl, averaging 14.9ppl for petrol and 16.3ppl for diesel.
The CMA attributes these high spreads to ongoing challenges in market competition rather than temporary fluctuations in wholesale prices.
Relief on the Horizon?
1. Fuel Price Monitoring Function
Starting next year, a new system will track fuel prices and scrutinise retailer pricing practices to promote competition and help keep costs down.
2. ‘Fuel Finder’ Scheme
A government-backed real-time fuel price comparison tool is set to launch by the end of 2025. This system will empower drivers to locate the cheapest prices via navigation apps, in-car devices, and websites like PetrolPrices.com.
Dan Turnbull, Senior Director of Markets at the CMA, stated:
“…Drivers are paying more for fuel than they should be as they continue to be squeezed by stubbornly high fuel margins. These new measures will empower drivers to find the cheapest fuel prices wherever they are in the UK, increase competition, and support the economy.”
Retailers’ Response
Responding to the Competition and Market Authority’s (CMA) observations on developments in the road fuel retail market since the previous update in July 2024, Gordon Balmer, Executive Director of the Petrol Retailers Association, said:
“Petrol retailers continue to price fuel as low as possible in a highly competitive market while grappling with rising costs in the form of business rates, National Insurance, National Minimum Wage and electricity. The CMA has acknowledged these increased costs as a factor and it is crucial these are incorporated into future analysis to give a complete picture.
“We have supported the CMA throughout their investigation and will continue to do so by providing information and evidence that clearly outlines how the surge in fixed costs is impacting pump prices and the steps needed to address it. I look forward to seeing the CMA incorporate these statistics into their next report.
“Until the Government’s fuel price transparency scheme is introduced, I would urge motorists to use apps like petrolprices.com to find the best deals available to them.”
The major cause of higher prices than are necessary is the taxes extracted by the government, once again they are blaming others for their greed.
Because, as we know, the private sector are known for their benevolence and selflessness.