Fuel prices are staying higher than they should be say observers.
RAC head of policy Simon Williams said, “Drivers will be concerned to hear that retailer margins on fuel are still above where they have been historically and that competition remains weak.
“Given fuel is a major expense for households, and with eight-in-10 drivers dependent on their cars, it’s disappointing to see they’ve paid over the odds yet again. We have to hope the launch of the government-backed Fuel Finder scheme, due at the end of the year, will stimulate competition and finally lead to fairer pump prices.
“In the meantime, drivers should use a price checking tool.”
Britain is heading into its summer getaway season when demand will be high and this tends to keep up forecourt prices with less competition for lower fuel.
The CMA found that fuel margins were similar to the high levels seen during its road fuel market study – a review of the market to understand the factors influencing fuel prices undertaken in 2023 – which suggests overall competition in the UK’s road fuel retail market remains weak.
Supermarket fuel margins fell from 8.9% in December 2024 to 7.9% in February 2025, before rising to 8.3% in March 2025. Non-supermarket fuel margins fell from 9.9% in December 2024 to 8.9% in January 2025, before rising to 10.4% in March 2025.
This report does not consider developments in operating costs since the road fuel market study. The CMA will undertake a review of fuel retailer operating costs in its first annual road fuel monitoring report later this year to assess whether operating cost changes are impacting fuel margins for large retailers.
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 – across the UK from March 2025 to May 2025.
Petrol retail spreads averaged 15.4 ppl, which was 1.5 ppl higher than the previous 4 months period – and still more than double the average of 6.5 ppl over 2015-19. Diesel retail spreads averaged 18.8 ppl, which was 4.6 ppl higher than the previous 4 months period and more than double the average of 8.6 ppl in 2015 – 2019.
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 should return to a normal range over time, if the market is working well.
