The Competition and Markets Authority (CMA) said it is ‘deeply concerned’ by evidence that companies are keeping pump prices higher than they should be, even after allowing for the rising cost of crude oil
Drivers are overpaying at petrol stations as retailers continue to rake in profits “far above historic levels”, the competition watchdog has revealed. The Competition and Markets Authority (CMA) said it is “deeply concerned” by evidence that companies are maintaining pump prices higher than justified, even after accounting for rising crude oil costs.
Its latest monitoring report reveals petrol climbed by 1.9p a litre to 133.9p between the end of May and August, whilst diesel soared 3.5p to 141.9p. Whilst part of the rise was attributed to Brent crude reaching a near two-month peak, the CMA said fuel margins – the gap between what retailers pay for fuel and the price charged to motorists – remain artificially high.
Supermarket margins swelled to between 8% and 9.1% in the second quarter of the year, compared with just 4% in 2017. Other petrol retailers pushed theirs to as much as 10.6%, against 6.4% in 2017. Across the first half of this year, supermarkets averaged 8.4% whilst non-supermarkets reached 9.8%.
Dan Turnbull, the CMA’s senior director of markets, said: “Drivers across the UK have been paying more at the pump. While recent price rises are partly explained by an increase in the price of oil, what’s deeply concerning is that fuel margins … remain far above historic levels.”
The findings triggered fresh anger from motoring groups, who accused retailers of profiteering at a time when families are already struggling with soaring living costs. Luke Bosdet, the AA’s fuel price spokesman, said: “UK consumers faced by inflationary pressures on all fronts and trying to stretch their budgets as far as they can will be incensed by this confirmation of what they suspected – they continue to be ripped off at the pumps.
“The most blatantly obvious sign of this is the postcode lottery of pump prices between neighbouring towns. This is where price-matching between local rivals often, in effect, gives them permission to charge significantly more than in a town down the road.”
RAC head of policy Simon Williams said: “It’s very concerning that the CMA has once again concluded that fuel margins remain historically high. Unfortunately, the CMA’s ongoing scrutiny appears so far to have had little effect on changing retailer behaviour.”
He said hope of seeing more competitive prices on the nation’s forecourts now rests on the Government’s Fuel Finder scheme which is due to come into operation at the end of the year. This will allow drivers to search for the cheapest forecourts.
Mr Williams said: “If retailers being mandated to report their prices daily doesn’t lead to greater competition in the market, then further questions will need to be asked.”
He added: “We also look forward to seeing the results of the CMA’s first annual road fuel monitoring report at the end of the year as this will look at retailer operating costs and their impact on margins.”
The CMA has repeatedly warned that lack of transparency in pump pricing means motorists cannot see whether falls in wholesale costs are being passed on. The Petrol Retailers Association said: “Our members continue to price fuel fairly.
“Comparisons with historic fuel margins do not take into account the significant rise in operating costs faced by fuel retailers. These include increased borrowing costs, energy prices, wages, employers’ National Insurance contributions and record levels of forecourt theft.”