The UK Competition and Markets Authority (CMA) has published a report indicating that fuel margins for retailers are still high compared to historical levels, despite a recent decline in petrol and diesel prices. This situation raises concerns about the competitiveness of the UK road fuel retail market.

From the end of February 2025 to the end of May 2025, average petrol prices fell to 132.0 pence per litre, and diesel prices dropped to 138.4 pence per litre. These reductions reflect fluctuations in global crude oil prices and refining spreads. However, the CMA's findings suggest that the overall competition in the market remains weak, as fuel margins have not significantly decreased.

The report highlights that supermarket fuel margins decreased slightly from 8.9% in December 2024 to 7.9% in February 2025, before rising again to 8.3% in March 2025. Non-supermarket margins showed a similar trend, indicating a lack of competitive pressure in the market. The CMA plans to review fuel retailer operating costs in its upcoming annual monitoring report to determine their impact on fuel margins.

Additionally, the CMA analyzed retail spreads, which represent the difference between the price consumers pay at the pump and the price retailers pay for fuel. The average petrol retail spread was found to be 15.4 pence per litre, significantly higher than historical averages, while diesel retail spreads averaged 18.8 pence per litre. This suggests that consumers are still paying more than they should, indicating potential issues with market competition.

In response to these findings, the CMA has recommended the establishment of a 'fuel finder' scheme to help consumers compare real-time fuel prices. This initiative aims to enhance competition among retailers and ultimately lower prices for drivers. The government is expected to launch this scheme by the end of the year, pending legislative approval.