UK fuel prices aren’t coming down as expected, with retailers blamed

Petrol and diesel prices remain stubbornly high and a new report by the UK’s competition regulator has pointed towards historically wide retailer margins as one of the root causes.

In its quarterly update on the fuel sector, the Competition and Markets Authority set out how the cost of fuel remains stubbornly high despite having dipped in recent months. At the time of writing, petrol sits at an average of £1.34 per litre, while diesel costs around £1.41 per litre.

Part of the reason for these lofty prices are wide retailer margins which, between January 2024 and March this year averaged as high as 9.2 per cent and 8.1 per cent for standard retailers and supermarkets respectively. This, the CMA says, cost drivers an extra £1.6 billion over the course of 2023 compared with 2019 – something that won’t have gone down much in 2025 given how margins have remained by and large the same.

Things look even worse for retailers when you consider that the CMA’s 2023 market analysis concluded that rising operational costs weren’t a driver of margin increases. The fuel industry insists that since then things have gotten even more expensive, however, citing raises in the National Living Wage, business rates, energy prices and a surge in forecourt crime. 

Interestingly, as part of its submission regarding operating costs, the UK’s Petrol Retailers Association (PRA) even mentioned the cost of installing EV chargers at forecourt locations as a justification of current profit margins.

Auto Express has approached the PRA for its reaction to the report as a whole, but is yet to receive a response.

In the meantime, the RAC’s head of policy, Simon Williams, expressed concern regarding the CMA’s findings, saying “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.”

There were wide concerns in recent weeks over the conflict between Israel and Iran that it could send oil and thus fuel prices spiralling; after an initial spike this seems to have subsided – in part due to the ongoing ceasefire.

Later this year, the government’s forthcoming FuelFinder app will finally land, placing live pricing in the palm of motorists' hands and, according to the CMA, should “help drive greater competition in the market”, thus lowering prices for consumers overall.

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