Drivers hit by ‘significant increases’ in fuel retailers’ margins – report
The Competition and Markets Authority said differences between pump prices and the wholesale cost of fuel were well above long-term averages.
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Your support makes all the difference.Drivers were hit by “significant increases” in fuel retailers’ margins during the past two months, a new report suggests.
The Competition and Markets Authority (CMA) said that by the end of October the differences between pump prices and the wholesale cost of petrol and diesel were “significantly above the long-term average”.
A continuation of the trend would “cause concern” about a lack of competition in the sector, the regulator added.
The RAC said the findings were “very disappointing” and demonstrate that “drivers are still being taken advantage of at the pumps”.
The Government needs to speed up the legislation that creates the statutory fuel price transparency scheme
The CMA analysed retail spreads for supermarkets, which show the difference between average pump prices and benchmark wholesale costs for fuel.
Retail spreads are likely to be similar to margins, which are based on wholesale cost data provided by individual retailers.
The CMA said: “During September and October … we have seen significant increases in retail spread for both petrol and diesel.”
It added: “Given the link we have observed between retail spreads and retailer fuel margins, the increase in retail spreads in September and October suggests that fuel margins may have also increased.”
The CMA provided detailed figures for supermarket fuel retailers’ margins up to the end of August.
These show the figure for the first eight months of the year was 8.1%, despite a fall in the summer.
That is higher than the six preceding entire years, which ranged from around 4% in 2017 to 7.6% last year.
In July, the CMA recommended retailers provide live pump price information, and a price monitoring body is created.
The Government has pledged to legislate for both measures.
RAC fuel spokesman Simon Williams said: “It’s very disappointing that the CMA has found that major fuel retailers are still taking far bigger margins than they have done in the past, something we have been saying for a long time, as this means drivers are still being taken advantage of at the pumps.
“While supermarket margins may have fallen in the summer, our latest data shows they have more than made up for this since then and are currently taking very large margins.
“We believe the situation is currently worse than ever as the wholesale fuel market is down significantly, yet forecourt prices are falling like the proverbial feather.”
AA fuel price spokesman Luke Bosdet said: “Old habits die hard in the road fuel trade.
“Failure to pass on the full savings from lower wholesale costs to hard-pressed motorists, their families and businesses is unacceptable in a cost-of-living crisis.
“The Government needs to speed up the legislation that creates the statutory fuel price transparency scheme.”
The UK’s four major fuel-selling supermarkets are Asda, Morrisons, Sainsbury’s and Tesco.
They were each approached for a comment.