The latest monitoring report on road fuel by the Competition and Markets Authority (CMA) has shown that prices at the pump have risen since late January, accompanied by above average margins and spreads.
The CMA is collecting data from fuel retailers under the interim scheme which remains voluntary, until the regulator’s statutory compulsory information gathering powers come into effect later this year.
The latest report, published on Thursday, sets out the CMA’s observations on developments in the market since the previous update in November 2023.
“Drivers are feeling the pinch as fuel prices have been edging up since January. We’re particularly concerned by high margins which indicate weakened competition and are not a good sign for drivers,” Dan Turnbull, senior director of markets at the CMA, said.
“[The] report reinforces the need for Pumpwatch and statutory powers to be in place as soon as possible, to ensure competition is effective in this market and to get a better deal for UK drivers.”
Fuel margins
The report has found that that fuel margins of retailers remain at the high levels seen during the CMA’s market study.
On a percentage basis, supermarkets recorded margins of 4 per cent in 2017, which increased to 7.6 per cent in 2022, the year the CMA carried out its market study, and 7.8 per cent in 2023. For other retailers, margins were 6.4 per cent in 2017, increasing to 7.3 per cent in 2022 and 9.1 per cent in 2023.
Fuel margin figures for 2023 are based on the calendar year, as the financial year is ongoing. All other annual figures are based on the financial year. As such, the comparison is not like-for-like but gives a strong indication of competition issues in the sector, the CMA said.
“This sustained increase in the level of fuel margins is concerning and suggests that a key finding of the CMA’s market study – that overall levels of competitive intensity have weakened in the road fuel retail market – remains valid,” the CMA said.
“This emphasises the importance of the government pressing ahead with its plans to implement both recommendations from the CMA, for a statutory monitoring function and statutory fuel-finder scheme, as soon as possible, which will help drive greater competition in the market.”
The CMA issued requests for information to: Applegreen – Petrogas, Asda, Bp, Esso, Euro Garages Ltd, Morrisons, Moto Hospitality, Motor Fuel Group, Rontec, Sainsburys, Shell, Tesco, and Welcome Break.
Responses were received in time for inclusion in this report from all but Shell, the regulator said, while adding that Shell has been providing data voluntarily in response to our information requests since January 2024.
Separately, the temporary pricing data scheme set up by the CMA now has 14 retailers participating, representing approximately 40 per cent of UK forecourts and more than 65 per cent of fuel sold. The data is used by third parties such as petrolprices.com and the AA, providing pricing information in an open, transparent manner.
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