Drivers impacted as fuel price margins ‘remain high’
Drivers are being hit by fuel price margins which “remain high compared to historic levels”, the competition regulator has said.
The Competition and Markets Authority (CMA) said it is “concerned about the intensity” of competition between fuel retailers.
Margins show the difference between the cost of retailers acquiring fuel and the revenue they generate from its sale.
Road fuel costs started to fall in mid-January but it took until the first week of March before pump prices showed any signs of downward movement. Fuel retailers continue to drag their feet on passing on savings
Motoring organisations claimed retailers “continue to drag their feet on passing on savings”.
The CMA said retailers’ petrol spreads – the difference between pump prices and estimated wholesale costs plus fuel duty, VAT and biofuel – averaged 13.8p per litre in the four months to the end of February.
It stated: “Retail spreads and margins remain high compared to historic levels, as has continued to be the case for most of the period since our market study.”
It added: “The CMA remains concerned about the intensity of retail competition between fuel retailers.”
The winter months are demanding on fuel consumption and, when potential relief might have been available, the fuel trade failed to step up for its customers
The CMA previously warned that increased margins compared with 2019 meant UK drivers paid £1.6 billion more for fuel in 2023.
AA road fuel price spokesman Luke Bosdet said: “Road fuel costs started to fall in mid-January but it took until the first week of March before pump prices showed any signs of downward movement.
“Fuel retailers continue to drag their feet on passing on savings.
“This was particularly damaging for workers, families and small businesses who rely on their road vehicles to function each day.
It’s disappointing to see that retail fuel margins remain far higher than they used to be because this means drivers still aren’t getting fair prices at the pumps
“The winter months are demanding on fuel consumption and, when potential relief might have been available, the fuel trade failed to step up for its customers.”
RAC head of policy Simon Williams said: “It’s disappointing to see that retail fuel margins remain far higher than they used to be because this means drivers still aren’t getting fair prices at the pumps.”
The CMA was given powers to monitor fuel prices from the start of the year.
The Government is aiming for a fuel-finder service making it easy for motorists to view pump prices in their area will be launched by the end of 2025.
Mr Williams said: “Both of these new measures will be judged on how effective they are at delivering greater transparency and fairer fuel prices for the UK’s 43 million drivers.”
Dan Turnbull, CMA senior director of markets, said: “While there are several factors contributing to the higher fuel prices seen in recent months, fuel margins remain stuck at high levels which impacts prices paid by drivers at the pump.
“The fuel finder scheme set to launch this year should be a game changer for drivers, allowing them to find the cheapest fuel prices while boosting competition between fuel retailers.”
