UK Drivers Being Overcharged as Fuel Prices Fail to Track Oil Market, Watchdog Finds
The Competition and Markets Authority (CMA) has found that UK fuel prices remain persistently high and do not reflect the decline in wholesale oil prices, indicating weak competition among fuel retailers. The CMA's analysis shows that fuel operating costs do not justify the continued high margins charged by non-supermarket retailers.
Retailers have claimed that lower wholesale prices are offset by higher operating expenses, but the CMA's findings do not support this explanation. The Automobile Association (AA) reported that wholesale petrol costs fell by over 7 pence per litre since the end of November, which should translate to an approximately 8.4 pence (£4.60) reduction per tank including VAT. However, pump prices decreased by only about two-thirds of a penny per litre.
Current average prices stand at 135 pence per litre for petrol and 142 pence per litre for diesel, both approximately 8 pence per litre lower than the previous year. Despite this year-on-year decline, fuel margins remain elevated and reflect historically high levels among non-supermarket retailers.
The CMA reiterated concerns about ongoing overcharging and noted that the structure of the fuel retail market, rather than increased operating costs, limits greater price reductions.
To enhance price transparency and competition, the CMA will launch a new fuel finder scheme next year. This initiative will enable drivers to compare pump prices in real time via navigation apps and price comparison websites.
