News: Drivers Overpaying For Fuel...

Increased fuel margin from retailers cost drivers £1.6bn

Drivers are overpaying for fuel due to historically high retailer margins, according to the Competition and Markets Authority (CMA). This increase in fuel margins since 2019 cost drivers an additional £1.6 billion in 2023.

The CMA reports that competition among fuel retailers is inadequate, continuing a trend identified in their 2022 road fuel market study. Simon Williams of RAC criticised the situation, noting that drivers feel "ripped off" due to the lack of market competition.

The CMA's third Road Fuel Interim Monitoring Update highlights that fuel prices and margins remain high. Between March and June 2024, petrol prices rose slightly, while diesel prices fell. Despite some recent volatility, retail spreads for both petrol and diesel remain more than double the averages from 2015-2019.

Supermarket fuel margins decreased from 8.1% in December to 7% in April 2024, while non-supermarket margins dropped from 10.4% to between 7.7-8.5%. Despite these reductions, margins remain high compared to historical levels.

The CMA remains concerned about weak competition among fuel retailers. It had previously recommended a smart data-driven fuel finder scheme to help motorists find cheaper fuel in real-time, potentially saving them up to £4.50 per fill-up. Although a temporary price data-sharing scheme has started, it only covers 40% of fuel retail sites.

The CMA hopes the new Government's proposed Digital Information and Smart Data Bill will establish a mandatory, comprehensive scheme for better market transparency.