The Competition and Markets Authority (CMA) has highlighted ongoing issues within the UK fuel sector, revealing that drivers are still facing inflated prices due to what they describe as "stubbornly high" retail margins. The watchdog emphasized that competition in the market has weakened, leading to consumers paying more at the pump than they should be.
According to the CMA's findings, fuel margins have continued to rise above historical levels, with supermarket fuel margins increasing from 7% in April to 8.1% in August, and non-supermarket fuel margins climbing from 7.8% to 10.2% within the same period. This sustained increase in margins suggests that competition in the road fuel retail market remains insufficient, contributing to higher prices for consumers. Dan Turnbull, Senior Director of Markets at the CMA, expressed concern over the impact of these high fuel margins on drivers, noting that despite a decrease in fuel prices since July, consumers are still being squeezed by the elevated margins, indicative of weak competition in the sector.
The CMA's report also touched upon the fact that petrol and diesel prices have seen a reduction from June to October, influenced by global factors such as crude oil costs. However, the retail spread, representing the difference between the pump price paid by drivers and the benchmark price paid by retailers for fuel, remains above the normal range of 5p to 10p per litre. Throughout the period from July to October, petrol prices were on average 14.9p per litre higher than the benchmark, while diesel prices were 16.3p per litre above, indicating a lack of competitive pricing in the market. Simon Williams, Head of Policy at the RAC, expressed disappointment over the persisting high margins among fuel retailers and echoed hope that the government's fuel-finder scheme would lead to increased competition and fairer pricing for consumers across the UK.