Drivers are still paying too much to fill up their vehicles with fuel, according to the competition watchdog with supermarket profits margins roughly double what they were in 2019.
The Competition and Markets Authority (CMA) said that weak competition in the fuel sector is hitting motorists in the pocket with high prices costing them £1.6bn last year. Last year it found drivers had overpaid by £900m in 2022.
The CMA said that a year after criticising the market for failing customers, it has found little progress and that the public still needed more help to find cheaper fuel.
Sarah Cardell, chief executive of the CMA, said: “Last year we found that competition in the road fuel market was failing consumers, and published proposals that would revitalise competition amongst fuel retailers.
“One year on and drivers are still paying too much.”
It found that retailers’ fuel margins – the difference between what they pay for their fuel from refineries and the price they sell it at – are “still significantly above historic levels”.
Ms Cardell said the watchdog would work with the Government to put in place its recommendation of a real-time fuel finder scheme to enable drivers to better identify the cheapest fuel and kick-start competition among retailers.
“This will put the power in the hands of drivers who can compare fuel prices wherever they are, sparking greater competition,” Ms Cardell said.
The CMA found that the temporary price data-sharing scheme was still only covering four in 10 service stations.
The watchdog said the scheme was not comprehensive enough to be utilised by map apps or sat-navs to bring accurate, live information to people.
Supermarkets would use petrol and diesel to lure shoppers but post-pandemic that changed as retailers invested more in household essentials as the cost of living crisis hit more and more families.
The regulator’s third monitoring report follows longstanding claims by motoring groups of fuel profiteering. Ahead of the election the RAC said both petrol and diesel are still too expensive on forecourts in England, Wales and Scotland. It found that only drivers in Northern Ireland are getting a fairer deal at the pumps as a litre of petrol there sells for an average of just 140.5p – 4.5p cheaper than the UK average. Diesel is 142p – 8p less than the UK-wide price.
Simon Williams, RAC head of policy, said: “This, the third report from the CMA, contains many findings that we feared. To see that drivers have paid £1.6bn more than they should have in the last year is nothing short of outrageous, especially when so many are dependent on their vehicles. Drivers have every right to feel ripped off, especially knowing there is virtually no market competition between retailers.
“The report is, once again, confirmation of what we have known and been campaigning against for many years. Our analysis has long shown that even accounting for retailers’ increased operating costs, margins on fuel are at extremely questionable levels.
“The CMA couldn’t be any clearer about what needs to happen. We have already written to the new energy secretary, urging him to implement its recommendations as quickly as possible. This means greater transparency of fuel prices from all retailers and, most importantly of all, a price monitoring body that can take decisive action on retailers whenever drivers are overcharged. This can’t happen soon enough.”
Independent fuel retailers deny suggestions that prices are too high, insisting critics are taking no account of their own additional costs for things such as wages and electricity.
