Drivers are being “ripped off” everyday at the pumps with increases in fuel margins costing motorists more than £1.6billion last year.
Retailers’ fuel margins – the difference between what they pay for fuel and the price they sell it at – are “still significantly above historic levels”, according to the Competition and Markets Authority (CMA).
The competition watchdog said Britain’s fuel market is still “failing consumers” a year on from its first report, which laid bare major issues in the sector.
Increases in fuel margins cost drivers more than £1.6bn in 2023, with supermarkets’ fuel margins now roughly double what they were in 2019, according to the CMA.
The RAC said drivers feel “ripped off” by fuel retailers. The motoring group’s Head of Policy, Simon Williams, said: “To see that drivers have paid £1.6 billion more than they should have in the last year is nothing short of outrageous, especially when so many are dependent on their vehicles.
“Drivers have every right to feel ripped off, especially knowing there is virtually no market competition between retailers.”
The CMA urged the Government to use recent legislation to launch a compulsory scheme to ensure fuel retailers share price information to allow motorists to compare forecourt deals.
A temporary price data-sharing scheme was launched by the CMA after its previous report found problems in the market. However, that scheme is voluntary and only covers 40 percent of fuel retail sites across the UK.
Sarah Cardell, Chief Executive at the CMA, said: “Last year we found that competition in the road fuel market was failing consumers, and published proposals that would revitalise competition amongst fuel retailers. One year on and drivers are still paying too much.”
Ms Cardell said the CMA wants to work with the Government to put in place its recommendation of a real-time fuel finder scheme to kick-start competition among retailers.
She added: “This will put the power in the hands of drivers who can compare fuel prices wherever they are, sparking greater competition.”
The CMA said a smart data, real-time fuel finder scheme would allow motorists to save up to £4.50 each time they fill up and would make it easier to find cheaper forecourts.
It said the proposed introduction of the Digital Information and Smart Data Bill by the new Government could provide the legislative basis to set up a compulsory and comprehensive scheme, which the CMA would welcome.
The competition watchdog said the legislation needed to establish the scheme fully may take time to come into force.
Until such a scheme is established, the CMA called on the Government to introduce an enhanced interim voluntary scheme which would be “as close to the final scheme as possible”.
A Department for Energy Security and Net Zero spokesperson said: “Retailers must give drivers a fair price for their fuel, by passing on any savings at the pump.
“We welcome the CMA’s ongoing work to investigate fuel prices set by road fuel retailers and we continue to monitor the situation closely.
“The Energy Secretary (Ed Miliband) will consider the findings of the CMA’s latest report carefully and further updates will be set out in due course.”
