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Weak competition added 6p to supermarket fuel prices Weak competition added 6p to supermarket fuel prices
(32 minutes later)
Drivers paid an extra 6p per litre for fuel at supermarkets last year as weak competition allowed stores to push up profit margins, a watchdog says.Drivers paid an extra 6p per litre for fuel at supermarkets last year as weak competition allowed stores to push up profit margins, a watchdog says.
The Competition and Markets Authority said supermarkets were usually the cheapest for fuel, but the market was "not working as well as it should be". The Competition and Markets Authority (CMA) said this meant drivers using supermarkets had been faced with additional costs of "around £900m".
The regulator recommended a "fuel finder scheme" to help drivers find better live prices online. Ministers are backing the CMA's call for a fuel finder scheme to help drivers find better live prices online.
CMA boss Sarah Cardell said "something needs to change swiftly".CMA boss Sarah Cardell said "something needs to change swiftly".
"Drivers buying fuel at supermarkets in 2022 have paid around 6 pence per litre more than they would have done otherwise, due to the four major supermarkets increasing their margins," she said."Drivers buying fuel at supermarkets in 2022 have paid around 6 pence per litre more than they would have done otherwise, due to the four major supermarkets increasing their margins," she said.
"This will have had a greater impact on vulnerable people, particularly those in areas with less choice of fuel stations.""This will have had a greater impact on vulnerable people, particularly those in areas with less choice of fuel stations."
Petrol and diesel prices spiked to record highs in the immediate aftermath of Russia's invasion of Ukraine but have dropped significantly since then.Petrol and diesel prices spiked to record highs in the immediate aftermath of Russia's invasion of Ukraine but have dropped significantly since then.
The CMA has been investigating the UK fuel market amid concerns that falling wholesale prices are not being passed on to consumers.The CMA has been investigating the UK fuel market amid concerns that falling wholesale prices are not being passed on to consumers.
According to the watchdog, average annual supermarket margins on fuel had increased by 6p per litre between 2019 and 2022. According to the watchdog, supermarkets were usually the cheapest place for fuel, but it said competition was "not working as well as it should be".
Average annual supermarket margins on fuel had increased by 6p per litre between 2019 and 2022, it said.
It also found that Asda's targeted fuel margins for 2023 were more than three times what they had been for 2019, while Morrisons' target doubled in the same period.It also found that Asda's targeted fuel margins for 2023 were more than three times what they had been for 2019, while Morrisons' target doubled in the same period.
The CMA said Sainsbury's and Tesco had followed suit by raising prices, indicating "competition has weakened". The CMA said Sainsbury's and Tesco had also raised prices indicating that "competition has weakened".
Fact v fiction: Five tips for saving petrol money examinedFact v fiction: Five tips for saving petrol money examined
The RAC spokesman Simon Williams said drivers appeared to have lost nearly £1bn as a result of increased retailer margins on fuel. The RAC's spokesman Simon Williams said: "It is nothing short of astounding in a cost-of-living crisis and confirms what we've been saying for many years that supermarkets haven't been treating drivers fairly at the pumps."
"It is nothing short of astounding in a cost-of-living crisis and confirms what we've been saying for many years that supermarkets haven't been treating drivers fairly at the pumps," he said. The government is backing the watchdog's call for a fuel finder scheme which will would enable drivers access to live, station-by-station fuel prices on their phones or satnavs.
"It's all about action now and we very much hope the government follows through with both of the CMA's recommendation."
The watchdog says a fuel finder scheme would enable drivers access to live, station-by-station fuel prices on their phones or satnavs would, revitalising competition in the market.
At present, retailers only provide price information at petrol stations themselves, making it hard to compare rates.At present, retailers only provide price information at petrol stations themselves, making it hard to compare rates.
The watchdog wants the scheme to be backed by a new "fuel monitor" oversight body providing ongoing scrutiny of prices. The government said the law would be changed to force fuel retailers to share information. A new "fuel monitor" oversight body will also be set up to provide ongoing scrutiny of prices.
The AA said it had called for this type of price tracking since investigating similar schemes in Austria and Denmark back in 2012. Grant Shapps, the Energy Security Secretary, said the changes would "shine a light on rip-off retailers to drive down prices and make sure they're held to account".
The AA said it had been calling for this type of price tracking more than a decade, when it first investigated similar schemes in Austria and Denmark.
Spokesman Luke Bodset said: "The push towards an 'open data fuel finder scheme' is therefore a huge leap forward in fair pricing at the pump and needs to be in place by the end of the year.Spokesman Luke Bodset said: "The push towards an 'open data fuel finder scheme' is therefore a huge leap forward in fair pricing at the pump and needs to be in place by the end of the year.
"Drivers will be drawn to the cheaper fuel stations and that will pressure other forecourts to bring down their prices, thus stimulating the level of competition that has been missing for the past three years.""Drivers will be drawn to the cheaper fuel stations and that will pressure other forecourts to bring down their prices, thus stimulating the level of competition that has been missing for the past three years."
As of Monday, unleaded petrol costs on average 143.86p per litre while diesel costs 145.54p, according to RAC data.As of Monday, unleaded petrol costs on average 143.86p per litre while diesel costs 145.54p, according to RAC data.
That is down sharply from the record highs seen last July, but still above pre-pandemic trends.That is down sharply from the record highs seen last July, but still above pre-pandemic trends.
How to save money on petrol and dieselHow to save money on petrol and diesel
Watch your speed: The RAC says 45-50mph is the most efficient speed to drive for fuel efficiencyWatch your speed: The RAC says 45-50mph is the most efficient speed to drive for fuel efficiency
Switch off the air conditioning: Extra energy is needed to power a car's air conditioning system and turning it on can increase your fuel consumption by up to 10%, according to the AASwitch off the air conditioning: Extra energy is needed to power a car's air conditioning system and turning it on can increase your fuel consumption by up to 10%, according to the AA
Check your tyre pressure: Underinflated tyres will use up extra petrol. Check your pressures regularly, especially before heading off on a long journeyCheck your tyre pressure: Underinflated tyres will use up extra petrol. Check your pressures regularly, especially before heading off on a long journey
For more tips click hereFor more tips click here
Related TopicsRelated Topics
Competition and Markets AuthorityCompetition and Markets Authority
InflationInflation
FuelFuel