Government slams ‘persistently high’ fuel prices

The influential Competitions and Markets Authority (CMA) has warned UK filling stations that their operating costs "do not explain why fuel margins remain at persistently high levels."

The damming verdict came as the CMA released its first annual road fuel monitoring report, following new powers granted by the government to the competitions authority.

The warning comes a year after the government authority warned filling stations that fuel was still, yes, too expensive. 

Despite filling stations' claims to the contrary, the CMA reckons fuel retailer operating costs have not impacted their profitability, meaning that cannot be an excuse for why fuel margins are so high compared to historic levels.

Indeed, says the competition watchdog, profit margins for large fuel retailers are actually increasing.

"This indicates competition in the sector is weak," says CMA senior director of markets Dan Turnbull. "If it was working well, drivers could see lower prices at the pump."

The CMA hopes a new fuel finder scheme, set to go live this year, will spur competition by helping drivers find the best deals.

The new system will allow motorists to compare real-time fuel prices through sat nav apps and price comparison websites.

"We know fuel costs are a big issue for drivers… this is why the fuel finder scheme is crucial – it will put power back the hands of motorists and save households money."

While average fuel margins for supermarket fuel retailers have trended downwards, they’ve been increasing for non-supermarket filling stations over the past year. They now stand at 11.1p per litre of fuel, up from 10.8p last year.

Supermarkets are currently making an average of 9.6p a litre.

The CMA has now reminded fuel retailers that it has an enforcement role under its new powers to ensure they provide data for the fuel finder scheme. And can tackle breaches including issuing fines.

It has, however, said that until at least May 2026, its focus will be on supporting businesses with the new regime rather than enforcement action.

And after that? Fuel retailers, you have been warned…