Fuel Price Dynamics Under Scrutiny: CMA’s Latest Findings
The Competition and Markets Authority (CMA) has raised concerns over persistently high fuel margins despite a decrease in pump prices over the past year. An analysis indicates that current operating costs for fuel retailers do not sufficiently explain why profit margins are remaining elevated compared to historical figures, suggesting a lack of competition within the market.
CMA’s Analysis Raises Red Flags
In a recently published report, the CMA highlighted that while average fuel prices for petrol and diesel have dropped – petrol averaging 135 pence per litre and diesel 142 pence per litre between November 2024 and October 2025 – the margins at which fuel retailers operate remain above traditional levels. The study, part of the CMA’s ongoing commitment to enhancing competition and safeguarding consumer interests, suggests that motorists should be witnessing lower prices if the market were functioning efficiently.
Fuel Margins and Operating Costs
The report revealed that fuel margins, which differ from the price retailers pay for fuel to what they charge customers, are a significant concern. For supermarket fuel retailers, margins dropped from a high of 10.9 pence per litre in 2022 to an average of 9.6 pence per litre in 2025. In contrast, non-supermarket retailers have seen a slight increase in margins, now averaging 11.1 pence per litre, up from 10.8 pence per litre in the previous year.
Interestingly, the operating profit margins for larger fuel retailers are reportedly on the rise, countering claims from some retailers that high margins were solely due to increased operating costs. This insight also indicates a potential stagnation in market competitiveness.
Retail Spreads and Consumer Impact
Another focal point of the analysis was the retail spread, the gap between the prices consumers encounter at the pump and benchmark pricing for fuel. Throughout 2025, petrol and diesel retail spreads averaged 13.9 pence and 14.6 pence per litre, respectively. While these figures show a decrease from the previous 12-month period, they still sit considerably above averages recorded between 2015 and 2019, underscoring ongoing market concerns.
Introduction of the Fuel Finder Scheme
To address these issues, the CMA announced the launch of a new ‘fuel finder’ initiative set to go live in the coming year. This scheme will empower consumers by enabling them to compare real-time fuel prices through navigation applications and price comparison websites. Such a tool is anticipated to enhance competition among fuel retailers as they vie for customers’ patronage.
Regulatory Enforcement and Compliance
The CMA will enforce new regulations requiring fuel retailers to provide essential data for the fuel finder initiative. Failure to comply could result in punitive actions, including fines. While the CMA intends to focus on guiding retailers to meet these new requirements until at least May 2026, it has made it clear that it will take necessary enforcement actions against non-compliance.
Background
The CMA’s recent report builds on its previous road fuel market study, which aimed at improving fuel price competitiveness for consumers. The current findings indicate that despite vehicles becoming more efficient and crude oil prices fluctuating, the benefits have not been cascaded to the consumer level in the form of lower prices.
Source: official statements, news agencies, and public reports.
https://www.gov.uk/government/news/fuel-margins-remain-persistently-high-and-this-is-not-explained-by-operating-costs-cma-finds
