(qlmbusinessnews.com Fri. 26th July, 2024) London, UK —
Watchdog Warns Drivers Over Inflated Fuel Prices.
UK motorists continue to face excessively high fuel costs, with inflated prices costing drivers £1.6bn last year, according to the Competition and Markets Authority (CMA).
The CMA has highlighted weakened competition in the fuel sector as a major factor impacting consumers. Supermarkets' profit margins on fuel, the difference between the cost of purchasing fuel and the price charged to drivers, have doubled since 2019.
Sarah Cardell, CMA chief executive, told the BBC's Today programme that there needs to be increased pressure on supermarkets to offer fairer prices. “Drivers are still paying too much for road fuel,” she stated.
The CMA's investigation into the road fuel market, initiated last year, made several recommendations to help reduce fuel costs for motorists. One suggestion was a fuel finder scheme to help drivers locate the cheapest fuel in their area via map apps and sat-navs. Despite these recommendations, Ms Cardell noted that “one year on and drivers are still paying too much.”
The RAC described the situation as “outrageous,” with head of policy Simon Williams emphasising that drivers have “every right to feel ripped off” due to the lack of market competition.
The CMA plans to collaborate with the new government to implement a real-time fuel finder scheme, which could potentially save drivers up to £4.50 each time they refuel. Although some major retailers currently contribute to a voluntary price data sharing scheme, the CMA is urging the government to establish a mandatory system.
A spokesperson for the Department for Energy Security and Net Zero asserted that retailers must offer fair fuel prices by passing on savings at the pump. Energy Secretary Ed Miliband is expected to review the CMA's findings and provide updates soon.
Data from the CMA revealed that supermarket margins on fuel have risen from 4.4% in 2019 to 8%, while non-supermarket petrol stations have seen an increase from 6.8% to 8.5% over the same period.
The AA has also called for a mandatory ‘pump watch' scheme to allow drivers to easily identify which fuel outlets are overcharging. AA president Edmund King stated that this scheme would help drivers see “which fuel outlets are ripping them off.”
The CMA noted that in previous years, supermarkets like Asda and Morrisons led the market with lower prices. However, Asda’s decision to increase fuel margins led other retailers to follow suit, resulting in higher costs for drivers.
The CMA's report last year highlighted that Asda and Morrisons were acquired by private equity firms in 2021, the same year they increased their target fuel margins. Asda was bought by the Issa brothers and TDR Capital for £6.8bn, while Morrisons was acquired by Clayton, Dubilier & Rice for £7bn.
The British Retail Consortium stated that retailers will continue to work with the CMA to provide data that helps consumers find the best petrol and diesel prices.
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