26 July 2024

Drivers are charged an extra £1.6 Billion in increased retailer margins

UK drivers are still overpaying for fuel, with retailer margins remaining historically high, according to a new report by the Competition and Markets Authority (CMA).

The CMA estimates that increased fuel margins since 2019 led to drivers paying an additional £1.6 billion in 2023.

Competition among fuel retailers continues to fail consumers, a situation unchanged since the CMA’s July 2022 road fuel market study.

Industry chiefs expressed frustration, stating: “It is outrageous that drivers have paid £1.6bn more than they should have, especially when many rely on their vehicles. Drivers are justified in feeling ripped off due to the lack of market competition among retailers.”

The CMA's third Road Fuel Interim Monitoring Update indicates that, despite recent volatility, road fuel prices and margins have remained significantly higher than historical levels.

From March to June 2024, petrol and diesel prices initially rose, then declined by late June. Petrol prices in June stood at 144.43 pence per litre (ppl), up by 0.47ppl from four months earlier, while diesel prices were at 150.12ppl, down by 3.17ppl.

These price changes partly reflect fluctuations in crude oil prices and refining spreads, driven by global factors, according to the CMA.

Petrol retail spreads averaged 12.62ppl in the four months to June, 2.55ppl lower than the previous four months but still more than double the 2015-2019 average of 6.51ppl. Diesel retail spreads averaged 17.91ppl, 2.78ppl higher than the previous four months, and also more than double the 2015-2019 average of 8.61ppl.