Fuel margins remain high despite lower prices at the pump, watchdog finds
The Competition and Markets Authority (CMA) said retailers' margins – the difference between what they pay for fuel and what they sell it at – remained high compared to historic levels.
Fuel prices across the UK fell for both petrol and diesel over the three months to the end of May by 7.6 pence per litre (ppl) and 8.4 ppl respectively.
But the CMA found that fuel margins were similar to the high levels seen during its road fuel market study – a review of the market to understand the factors influencing fuel prices undertaken in 2023 – which suggested overall competition in the UK's road fuel retail market remained 'weak'.
Supermarket fuel margins fell from 8.9% in December 2024 to 7.9% in February 2025, before rising to 8.3% in March 2025, the regulator found.
Non-supermarket fuel margins fell from 9.9% in December 2024 to 8.9% in January 2025, before rising to 10.4% in March 2025.
The CMA also looked at the retail spread – the average price that drivers pay at the pump compared to the benchmarked price that retailers buy fuel at – across the UK from March 2025 to May 2025.
It found that petrol retail spreads averaged 15.4 ppl, which was 1.5 ppl higher than the previous four-month period – and still more than double the average of 6.5 ppl over 2015 to 2019.
Diesel retail spreads averaged 18.8 ppl, which was 4.6 ppl higher than the previous four-month period and more than double the average of 8.6 ppl in 2015 to 2019.
Dan Turnbull, senior director of markets at the CMA, said: 'While there is uncertainty over how global events will impact the price of oil, our report shows fuel margins remain high compared to historic levels despite lower prices at the pump in recent months.
'The Government committed to launching a 'fuel finder' scheme following our recommendation to help drivers compare real-time prices and boost competition.
'Once launched, it will make it easier than ever to shop around and find the best deals.'
RAC head of policy Simon Williams said: 'Given fuel is a major expense for households, and with eight in 10 drivers dependent on their cars, it's disappointing to see they've paid over the odds yet again.
'We have to hope the launch of the Government-backed Fuel Finder scheme, due at the end of the year, will stimulate competition and finally lead to fairer pump prices.'
AA president Edmund King said: 'Once again, the CMA has exposed boosted margins and profits from petrol and diesel. Road fuel is a critical part of a consumer and family budgets. Increased fuel costs have a major influence on inflation.
'While the hope is that pump price reporting, which becomes mandatory at the start of the next year, might bring about more competition, what is happening now is not only bad news for drivers and businesses but also siphoning off potential consumer spending for the likes of tourism and others.'
Mr King added: 'The clear and present danger now is the cost of petrol and diesel along holiday routes. Some of the prices are outrageous and we can only hope that drivers take maximum advantage of the price transparency provided by the CMA's voluntary reporting scheme to locate the competitive forecourts.'
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