A recent report has revealed that the increase in UK fuel prices is said to be unjustified. The investigation conducted by the Competition and Markets Authority (CMA) determined that Asda and Morrisons, the two cheapest fuel sellers, initiated the rise by targeting higher profit margins. As a result, Asda’s fuel margin target for 2023 was over three times what it was in 2019, while Morrisons doubled its margin target in the same period.

Other retailers such as Sainsbury’s and Tesco did not respond in a competitive manner. Instead, they raised their prices in line with the changes made by Asda and Morrisons. This lack of competition has weakened the market, leading the CMA to emphasize the need for action.

The report also highlighted the slow decrease in diesel prices, largely due to Asda gradually reducing its prices as wholesale prices fell. Additionally, other companies failed to respond competitively to this price decline. The CMA estimated that drivers paid 13ppl (pence per liter) more for diesel from January 2023 to the end of May 2023 compared to the historic average margins.

To address these issues, the CMA has suggested implementing a “fuel finder scheme” that would provide drivers with real-time fuel prices through their phones or satellite navigation systems. This scheme aims to revive competition in the retail road fuel market. The CMA also recommended the establishment of a monitoring body to hold the industry accountable.

The RAC spokesperson, Simon Williams, highlighted that the increase in retailer margins has resulted in drivers paying nearly £1 billion more for fuel, which is concerning given the current cost of living crisis. This confirms ongoing concerns about supermarkets treating drivers unfairly at the pumps.

A recent report has revealed that fuel profit margins have significantly increased since the war in Ukraine began. Asda and Morrisons, the two cheapest fuel sellers, were found to be the main instigators of this rise. However, Asda was also fined £60,000 for not fully co-operating with the investigation conducted by the Competition and Markets Authority (CMA).

In 2023, Asda aimed for a fuel margin target that was over three times higher than the target set in 2019. Similarly, Morrisons doubled its margin target during the same period.

It was also highlighted in the report that other retailers, such as Sainsbury’s and Tesco, did not respond competitively to the changing market conditions. Instead of lowering their prices, these retailers raised them. The CMA expressed concern about this lack of competition and emphasized the need for action.

Moreover, diesel prices have been slow to decrease due to Asda gradually reducing their prices in response to falling wholesale prices. This, combined with other firms’ failure to respond competitively, resulted in drivers paying an additional 13p per litre for diesel between January 2023 and the end of May 2023.

“Competition at the pump is not functioning as effectively as it should, and immediate changes are required to address this issue,” said Cardell, spokesperson for the CMA.