The Competition and Markets Authority (CMA) has released an update detailing the challenges drivers face due to high fuel costs.
According to the CMA, increased retail fuel margins have resulted in drivers paying over £1.6 billion more in 2023.
The report indicates that competition among fuel retailers remains weak, impacting consumer prices.
In its latest interim update, the CMA found that retailers’ fuel margins are significantly above historical levels.
Supermarkets’ margins have doubled compared to 2019.
The total cost to drivers from these increased margins was over £1.6 billion last year alone.
The CMA previously recommended a smart, data-driven fuel finder scheme to help motorists access real-time fuel prices via map apps and sat-navs.
This scheme could potentially save drivers up to £4.50 per fill-up by making it easier to find cheaper fuel options nearby.
The CMA is currently monitoring the fuel market using data voluntarily provided by retailers.
Although some major players have integrated this data into consumer-facing apps, the scheme covers only 40% of fuel retail sites, limiting its effectiveness.
The CMA welcomes the proposed Digital Information and Smart Data Bill, which could establish a compulsory and comprehensive fuel price scheme.
However, legislation may take time to implement.
In the interim, the CMA encourages the government to introduce an enhanced voluntary scheme to provide motorists with quicker access to fuel prices through everyday apps.
Sarah Cardell, Chief Executive of 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. We want to work with the government to put in place our recommendation of a real time fuel finder scheme to kick-start competition among retailers.
“This will put the power in the hands of drivers who can compare fuel prices wherever they are, sparking greater competition.”
RAC Head of Policy Simon Williams said: “This, the third report from the CMA, contains many findings that we feared. 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 report is, once again, confirmation of what we have known and been campaigning against for many years. Our analysis has long shown that even accounting for retailers’ increased operating costs, margins on fuel are at extremely questionable levels.
“The CMA couldn’t be any clearer about what needs to happen. We have already written to the new Energy Secretary, urging him to implement its recommendations as quickly as possible.”
Reacting to the CMA’s report, Gordon Balmer, Executive Director of the Petrol Retailers’ Association (PRA), said: “PRA members are committed to keeping pump prices as low as possible and operate in a highly competitive environment which is affected by a range of factors, including cost increases for retailers and geopolitical events.
“The CMA’s analysis does not take these complexities into account.
“We support any sensible measures that lower prices for consumers, including continuing the 5ppl cut and the fuel duty freeze, which accounts for more than 30% of the pump price.”
