The CMA compared fuel prices at the pump for drivers up until the end of October 2023 – and they have now reported on the troubling state of the industry.
Overall, while pump prices for both petrol and diesel have increased 11.1 pence per litre (ppl) for petrol and 13.9ppl for diesel since May 2023, this can be divided into 2 separate periods.
The report highlighted that during June, July and August, the increased appears to have been driven by global factors such as increased crude oil prices.
Wholesale prices then reduced in September and October while retail prices did not. According to the CMA, ‘this could indicate a lack of competitive response from fuel retailers if this trend continues’.
As a result, the competition watchdog will monitor these developments and how the retailers react to the report.
The CMA reviewed the fuel margins of supermarkets over this timeframe and found that profits remain higher than those for any year prior to 2021.
Sarah Cardell, Chief Executive of the CMA, said: “Drivers are feeling the pain again as petrol prices at the pump have been on the rise since June. The underlying data shows a mixed picture in terms of what is driving this.
“Over the summer we saw rising wholesale costs, but more recent trends give cause for concern that competition is still not working well in this market to hold down pump prices. We will be monitoring and reporting further on this in our next update.
“As our year-long, in-depth study showed, this is a market where competition is not working as well as it should. But while today’s first monitoring report is an important step, it is based on voluntary information and is missing some major fuel retailers.
“That’s why it is so important that a permanent fuel monitor – with powers to demand information from all retailers – is put in place to give a fuller picture of how the market is working.
RAC fuel spokesperson Simon Williams said: “It’s very disappointing that the CMA has found that major fuel retailers are still taking far bigger margins than they have done in the past, something we have been saying for a long time, as this means drivers are still being taken advantage of at the pumps. While supermarket margins may have fallen in the summer, our latest data shows they have more than made up for this since then and are currently taking very large margins.
“Even though off the back of the CMA report in the summer the largest retailers are now voluntarily publishing their prices daily for app-makers to use, our data shows this has had no effect whatsoever in improving competition and lowering prices. In fact, we believe the situation is currently worse than ever as the wholesale fuel market is down significantly, yet forecourt prices are falling like the proverbial feather.
“It’s blatantly clear to us that a price monitoring body – as recommended by the CMA – is desperately needed as major retailers cannot be trusted to price fuel fairly for their customers. But unless this body has the power to take action against major retailers that don’t lower prices quickly enough in a falling wholesale market, we fear little will change even then.”
The free myRAC app allows all drivers – whether RAC members or not – to compare prices of individual fuel forecourts across the country, and is comprehensive in its coverage.
What do you make of the reports findings? What can be done to make the cost of fuel fairer for drivers? Leave your comments below.
Hurry! Offer ends 15/05/24, 7am.
*Use code SAVE33 on Extra and Complete cover for 1 vehicle or person. New customers only. Ends 15/05/24, 7am. ^£7.00 for Basic cover, not in sale.
