Drivers in the UK are still paying too much for fuel, says the Competition and Markets Authority. Drivers paid out £1.6 billion more for petrol and diesel last year than they should have. This extra cost is because of too little competition among sellers of fuel.

Fuel Prices Too High

The CMA found that prices at most of the petrol stations are still very expensive. This situation occurs because fuel sellers are not competing with each other in trying to lower their prices. Today, the difference between what the sellers pay for the fuel and what they charge to drivers—the fuel margin—is much higher than compared to the past. For example, supermarkets charge doubles the margin charged in 2019.

Extra Costs for Drivers

It means drivers paid £1.6 billion extra for fuel in 2023, compared with £900 million extra in 2022—more than the year before. According to the CMA’s chief executive, Sarah Cardell, the findings are very worrying. She said high fuel prices hurt families and businesses since it is hard to manage their budgets accordingly.

Need for a Fuel Finder Scheme

CMA wants a legally binding fuel finder scheme; drivers should be able to see live prices for fuel from different stations using an app or satnav. In 2022, a probe by the CMA revealed that prices for petrol were higher due to weak competition among sellers of fuel. To sort out the matter, the government will force fuel sellers to share information on prices in real-time to help drivers find the cheapest fuel. These plans were, however, stopped before the elections in May.

Calls for Action

According to Simon Williams of RAC, a car service company, it was shocking that drivers paid £1.6bn more than they had to. Drivers feel cheated because there is close to no fight between fuel sellers. Williams said what was clear was the CMA’s recommendations. He called upon the new energy secretary to put these recommendations into action fast. This includes making fuel prices transparent and setting up a body to monitor prices and act when drivers are overcharged.

Response of Supermarkets

The British Retail Consortium, which represents the supermarkets, said they would cooperate with the CMA on fuel pricing. Their chief executive, Helen Dickinson, said all they want is for customers to get the best value from their supermarkets, whether this be in petrol or food. It expressed readiness to assist the CMA by providing data that would allow consumers to find the best fuel prices.

Wider probe

Part of a much larger probe into supermarket profits at times of high inflation, the CMA published a report on fuel prices yesterday. The CMA reported on Friday that supermarket chains had increased their profit margins but were still at or below 2020 levels. It has also probed whether supermarkets are hiking the prices of everyday goods to make their loyalty card discounts more attractive and found it unlikely. A full report on its findings will be published by the CMA in November, while an update on the cost of baby formula, also suffering from high inflation, will come in the autumn.

Quite simply, drivers all over the UK are forced to pay more than they should for fuel because of a lack of competition between sellers. The CMA has campaigned for more transparency and action to help drivers save money on fuel.