The Competition and Markets Authority (CMA) has concluded in its first annual road fuel monitoring report that fuel margins remain “persistently high” and are not explained by retailers’ operating costs. The watchdog says this pattern suggests “competition in the sector is weak” and that, if it were working properly, “drivers could see lower prices at the pump”.
Dan Turnbull, Senior Director of Markets at the CMA, said: “Fuel margins remain at persistently high levels – and our new analysis shows operating costs do not explain this.” He added: “This indicates competition in the sector is weak – if it was working well, drivers could see lower prices at the pump.”
Between November 2024 and October 2025, average UK petrol prices fell to 135 pence per litre, 8 pence lower than the previous year, while diesel averaged 142 pence per litre, also down 8 pence. The CMA notes that these declines reflect changes in crude oil prices, exchange rates and refining spreads rather than sharper competition in retailing.
Despite these lower pump prices, the authority reports that average fuel margins remain above historic norms, underlining continuing concerns about how the benefits of lower wholesale costs are shared with motorists. The report covers developments in the road fuel market up to October 2025.
The CMA’s analysis shows that supermarket fuel margins on a pence-per-litre basis have eased from a peak of 10.9p in 2022 to 9.6p so far in 2025 (January to September). By contrast, non-supermarket retailers have seen margins increase, with average margins rising to 11.1p in 2025 to date, up from 10.8p in the previous year.
The authority defines a retailer’s fuel margin as the difference between the price it pays for fuel and the price it charges drivers at the pump. It concludes that the persistence of higher margins “indicat[es] that competition in the road fuel retail market remains weak”.
In response to industry claims that rising operating costs explain higher fuel margins, the CMA has examined operating profit margins for large fuel retailers between 2020 and June 2025. Its report finds that these operating profit margins are increasing, rather than declining or remaining flat as would be expected if higher costs were eating into profitability.
“These findings challenge claims made by some fuel retailers that high fuel margins could be explained by operating costs,” the report states. The watchdog says the evidence suggests profitability in road fuel retailing has improved even as retailers point to cost pressures.
The CMA also looked at retail spreads – the difference between the average pump price and a benchmark wholesale price – between November 2024 and October 2025. Petrol and diesel retail spreads averaged 13.9p and 14.6p per litre respectively, above the 2015–2019 averages of 6.5p for petrol and 8.6p for diesel, even though they are lower than the previous 12‑month period.
To strengthen competition, a new ‘fuel finder’ scheme will launch next year, giving drivers real-time price information via navigation apps and comparison websites. Turnbull said the scheme “will put power back in the hands of motorists and save households money”, as retailers compete more directly on price.
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Under new regulations, the CMA will enforce requirements on fuel retailers to supply data for the fuel finder scheme and can issue fines for non-compliance. The authority has published enforcement guidance and confirmed that, until at least May 2026, its primary focus will be on helping businesses comply with the new regime rather than immediately resorting to punitive action.
The CMA says its ongoing monitoring and the rollout of fuel finder are designed to “promote competition and protect consumers” with the ultimate aim of supporting economic growth and improving household prosperity. Further updates on the market and on retailer behaviour are expected as the new system beds in over the coming years.
