The UK's competition regulator has issued a stark warning that motorists are probably paying more than they should for petrol and diesel, blaming "persistently high" profit margins at fuel retailers.
High Margins and Weak Competition
In its first annual report monitoring the sector, the Competition and Markets Authority (CMA) found that profit margins for both supermarkets and independent forecourts remain at historically elevated levels. This is despite a significant fall in the underlying wholesale cost of fuel.
The watchdog directly challenged industry justifications, stating that if rising operating costs were truly to blame, profit margins would be falling, not staying high or increasing. The CMA concluded that competition in the road fuel market is "weak," with a lack of competitive pressure stopping savings from being passed to consumers.
The Fuel Finder: A New Tool for Drivers
To tackle the problem, the government is preparing to launch a mandatory "fuel finder" data scheme. This initiative will legally require retailers to report any changes to their pump prices within 30 minutes of making them.
The live price information will then be made accessible through various mobile apps, websites, and in-car satnav systems. The CMA believes this greater transparency will empower drivers to shop around and force retailers to compete more aggressively on price.
Enforcement and Current Price Gap
The watchdog has been granted new powers to enforce these rules, including the ability to issue fines to businesses that fail to comply with the price reporting requirements.
The urgency of the situation was highlighted by the AA, which pointed out a growing disparity. While wholesale petrol costs have dropped by over 7p per litre since November, average pump prices have fallen by less than a penny. The motoring group accused retailers of "taking drivers for a ride" during the busy Christmas travel period.
Organisations like the RAC have welcomed the increased scrutiny and the new comparison tool, hoping it will help end unfair regional price variations and ensure fairer pricing for millions of drivers across the country.
