Drivers are paying more for fuel than they should because retailers’ profit margins remain “stubbornly high”, the competition watchdog has said.
The Competition and Markets Authority (CMA) said sellers’ margins – the difference between what a retailer pays for its fuel and what it sells at – remained higher than historic levels, although fuel prices have fallen since July.
It said supermarkets’ margins had risen to 8.1% in August from 7% in April.
The CMA added the “sustained” increase was concerning and there was not enough competition in the fuel market, which continued to drive prices up.
Non-supermarket fuel margins rose had risen to 10.2% in August from 7.8% in April, the watchdog 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,” said Dan Turnbull, senior director of markets at the CMA.
“We therefore remain concerned about weak competition in the sector and the impact on pump prices,” he added, especially while costs of living remain high.
“The more people save on fuel, the more they have to spend in other areas”, he said.
Motoring group RAC said the CMA’s findings were “disappointing”, especially after the regulator said in July that drivers had been overcharged on fuel by £1.6bn in 2023.
“We hope the introduction of the government-backed fuel finder scheme next year will succeed in driving greater competition and enable drivers all around the UK to benefit from fairer prices”, said the RAC’s Simon Williams.
The fuel finder scheme will allow drivers to compare real-time fuel prices and is due to be introduced by the end of 2025.