Supermarkets have been found to have inflated fuel prices by an average of 6p-per-litre, according to a report by the Competition and Markets Authority (CMA).
The investigation revealed that supermarkets took advantage of weakened competition to increase pump prices, affecting drivers who rely on them as the cheapest places to buy fuel. CMA chief Sarah Cardell highlighted the impact of these price rises on vulnerable individuals, particularly those in areas with limited options for fuel stations saying supermarkets would have had “a greater impact on vulnerable people, particularly those in areas with less choice of fuel stations”.
The report identified Asda and Morrisons as the main culprits behind the initial increase in fuel prices. Asda, which was fined £60,000 for not fully cooperating with the CMA investigation, saw its fuel margin target more than triple between 2019 and 2023. Morrisons also doubled its margin target during the same period. Sainsbury’s and Tesco, on the other hand, did not respond competitively and instead raised their prices in line with the changes initiated by Asda and Morrisons.
Diesel prices have also remained high due to Asda’s slower reduction of pump prices in response to falling wholesale prices. The CMA estimates that drivers paid 13p-per-litre more for diesel from January to May 2023 than they would have if margins had remained at their historic average.
To address the lack of competition in the retail road fuel market, the CMA has recommended the implementation of a “fuel finder scheme.” This scheme would provide drivers with access to live, station-by-station fuel prices through their phones or satnavs, promoting competition among retailers. The CMA also suggested the establishment of a monitoring body to hold the industry accountable.
The report has received praise from the RAC, with fuel spokesman Simon Williams calling it a “landmark day.” He emphasised the need for action and expressed hope that the government would follow through with the CMA’s recommendations.
While publishing pump prices is seen as a positive step, the creation of a fuel monitor within the government is considered more significant. Such a monitor would actively oversee wholesale prices to prevent forecourts from overcharging customers when the cost of buying fuel decreases.
Without these measures in place, the RAC is concerned that drivers will continue to face unfair treatment at the pumps.
