Fuel retailers give regulator ‘cause for concern’

Both petrol and diesel are up over 10 pence per litre

The Competition and Markets Authority (CMA) has published its first report from the monitoring programme it's conducting to understand how fuel retailers are pricing petrol and diesel. Initial conclusions suggest — surprise! — drivers have been overpaying at the pump.

The report keeps an eye on the difference in wholesale and retail prices and has tracked pricing up to the end of October 2023. Since May this year, it's identified a trend showing the price of petrol increasing by 11 pence per litre. Meanwhile diesel is up by over 13 pence per litre.

This in and of itself wouldn't be cause for concern, but for the fact wholesale prices have been trending down. Ah.

The report said: “During September and October we have seen significant increases in retail spread for both petrol and diesel. In both cases, the retail spread at end-October was significantly above the long-term average.

“While the retail spread does increase and decrease in response to volatility in wholesale prices, we would expect these spreads to begin returning to normal levels. If retail spreads were to remain at these levels for much longer, this would cause concern about the intensity of retail competition in the sector.”

The CMA also said profits of fuel retailers were higher than those in any year prior to 2021.

The regulator noted that participation by retailers was voluntary and there were some holes in its data where certain retailers haven’t cooperated, namely Moto-Way and Shell.

The report cited Asda as one supermarket showing ‘stronger price leadership’ (i.e. dropping their margins more keenly), but cautioned against overstating its position.

The monitoring continues for another eight months. Then? The basic premise seems to be that if retailers can’t self-regulate, the CMA will look to pass legislation to force more cooperation – something the government pledged to do by giving the regulator more powers to act.

Simon Williams, RAC fuel spokesperson, said: “It’s very disappointing the CMA has found major fuel retailers are still taking far bigger margins than they have done in the past, something we have been saying for a long time, as this