Fuel Prices UK: Drivers paid higher pump prices after supermarkets increased margins, watchdog discovers

Increased supermarket profit margins led to drivers paying an extra 6p per litre for fuel last year, an investigation has found. Watchdog the Competition and Markets Authority (CMA) said average supermarket fuel margins rose by 6p per litre between 2019 and 2022.

That led to an estimated combined additional cost of ‘around £900 million’ for customers of Asda, Tesco, Sainsbury’s and Morrisons, a report stated.

The inquiry also found that an increase in margins on diesel across all fuel retailers cost drivers an extra 13p per litre during the first five months of this year. The CMA recommended that the Government introduces legislation to enable a fuel finder open data scheme to be created.

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This would allow drivers to compare pump prices at different sites through apps or satnavs. Supermarket giant Asda was fined £60,000 by the CMA for failing to provide relevant information in a timely manner.

CMA chief executive Sarah Cardell said: ‘Competition at the pump is not working as well as it should be and something needs to change swiftly to address this. Drivers buying fuel at supermarkets in 2022 have paid around 6p per litre more than they would have done otherwise due to the four major supermarkets increasing their margins.

‘This will have had a greater impact on vulnerable people, particularly those in areas with less choice of fuel stations. We need to reignite competition among fuel retailers.’

In response to the Competition and Markets Authority’s (CMA) report into the UK fuel market, a spokesman for Asda said: ‘The CMA’s comprehensive road fuel market review recognised Asda as the price leader and confirmed the presence of an Asda petrol station in a local area keeps prices down for all motorists.

‘Despite record inflation, we have carefully managed our business to ensure Asda was the cheapest traditional supermarket for both groceries and fuel throughout the period reviewed by the CMA and this position is unchanged. The penalty notices relate to two individual alleged technical breaches in the way information was shared with the CMA over a 12-month period, during which time a significant number of documents were shared with the CMA to aid their study and we engaged fulsomely with their inquiries.

‘As the price leader in the supermarket fuel sector, we welcome any initiative that makes it easier for motorists to compare fuel prices, such as an app or other technology-based solutions.’