Fuel margins are still high, as the CMA saw during its market studyNew Pumpwatch powers must come into force so drivers can access real-time price data – to boost competitionThe Competition and Markets Authority (CMA) is collecting data from fuel retailers under the interim scheme which remains voluntary, until the CMA’s statutory compulsory information gathering powers come into effect later this year.Today’s report sets out the CMA’s observations on developments in the market since the previous update in November 2023. &nbsp;Dan Turnbull, Senior Director of Markets at the CMA, said: &nbsp;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.Today’s 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.Today’s report finds that fuel margins of retailers – the difference between what a retailer pay for its fuel and what it sells at – remain at the high levels seen during the CMA’s market study.On a percentage basis, supermarkets recorded margins of 4% in 2017, which increased to 7.6% in 2022 (the year the CMA carried out its market study) and 7.8% in 2023. For other retailers, margins were 6.4% in 2017, increasing to 7.3% in 2022 and 9.1% 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.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. 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 report covers fuel prices at the pump from the end of October 2023 to the end of February 2024.Overall, while pump prices for both petrol and diesel have decreased since October 2023, this can be divided into two separate periods.From late October to late January petrol prices decreased by approximately 14ppl (from 153.97ppl to 139.39 ppl) but between January and late February fuel prices have edged up by around 5ppl (to 144.73 ppl).The price of diesel also fell 14ppl (from 161.76ppl to 147.93ppl) between late October to late January. Since then, it has risen by over 6ppl (to 154.53ppl) between January and late February. This has been driven, in part, by global factors such as changing crude oil prices.The CMA also looked at the retail spread – the average price that drivers pay at the pump compared to the benchmarked price that retailers buy fuel at – from November 2023 to the end of February 2024.While spread analysis can give a quick overview of trends in the sector, it is a less reliable indicator of competitive intensity than individual retailers’ fuel margins.Retail spreads increase and decrease in response to the volatility of wholesale prices but are expected to return to a normal range over time.Retail spreads were above the long-term average of 5-10ppl, with petrol averaging 15.2ppl and diesel averaging 15.15ppl from November to February.This has increased since the CMA’s previous report, which covered the period of May to end-October, where the average spread was 12.3ppl for both petrol and diesel.If average spreads remain elevated for an extended period of time, this could indicate a lack of retail competition in the sector.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. However, 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% of UK forecourts and more than 65% 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.The CMA welcomes its role as the permanent fuel monitor and awaits the outcome of the consultation by the Department for Energy Security and Net Zero. This closed on 12 March.For more information, visit the <a href="https://www.gov.uk/government/collections/road-fuel-price-data-scheme" class="govuk-link">road fuel monitoring case page.</a>

CMA Raises Concerns Over High Fuel Margins

The Competition and Markets Authority (CMA) has expressed concerns over high fuel margins in the UK market, signaling weakened competition. The report reveals that fuel margins for retailers have remained high, with supermarkets recording margins of 7.8% in 2023 and other retailers at 9.1%. This sustained increase in fuel margins suggests a lack of competitive intensity in the road fuel retail market, prompting the CMA to push for the implementation of Pumpwatch and statutory powers to enhance competition. The CMA is collecting data from fuel retailers under a voluntary interim scheme until its compulsory information gathering powers come into effect later this year. The report also covers fuel prices and retail spreads from October 2023 to February 2024, highlighting fluctuations in prices and the impact of global factors like changing crude oil prices. The CMA issued requests for information to major fuel retailers, with responses received from all but Shell. The temporary pricing data scheme, with 14 participating retailers, aims to provide pricing information transparently to boost competition in the sector.

CMA Raises Concerns Over High Fuel Margins

The CMA's latest report highlights high fuel margins in the UK market, indicating weakened competition and a need for regulatory intervention.