Fuel prices have decreased across the UK, but competition “remains weak”, according to the Competition & Markets Authority, which has found retailer margins remain high.
In the watchdog’s latest road fuel monitoring report – quarterly updates aimed at reigniting competition in the market by holding the industry to account – it found the average petrol and diesel prices at the end of May 2025 were 132.0 and 138.4 pence per litre (ppl) respectively.
This represented a decrease of 7.6 ppl and 8.4 ppl in petrol and diesel prices compared with the end of February 2025.
It said these movements reflected, in part, changing crude oil prices and refining spreads, both of which are driven by global factors.
The CMA, however, found that retailer fuel margins – the difference between what a retailer pays for fuel and what it sells it for – were similar to the high levels seen during its road fuel market study in 2023, which was a review of the market to understand the factors influencing fuel prices.
The watchdog said its latest findings suggested overall competition in the UK’s road fuel retail market remained weak.
Supermarket fuel margins fell from 8.9% in December 2024 to 7.9% in February 2025, before rising to 8.3% in March 2025. Non-supermarket fuel margins fell from 9.9% in December 2024 to 8.9% in January 2025, before rising to 10.4% in March 2025.
Its road fuel monitoring reports do not consider developments in operating costs since the road fuel market study, which the Petrol Retailers Association has previously said are “significant contributors” to the rise in pump prices.
The CMA will undertake a review of retailer operating costs in its first annual road fuel monitoring report later this year to assess whether they are impacting fuel margins for large retailers.
The fuel monitoring function was a recommendation put forward by the CMA at the end of its road fuel market study in 2023. The quarterly updates are based on data provided to the CMA by fuel retailers using its new information gathering powers granted under the Digital Markets, Competition & Consumers Act.
The CMA also recommended a ‘fuel finder’ scheme, which would allow drivers to compare real-time fuel prices, via navigation apps, in-car devices and comparison websites. There is currently an interim voluntary scheme in place with 14 fuel retailers participating, including Tesco, Asda, BP and MFG, which collectively cover around 40% of UK petrol stations and 65% of fuel volume sold.
The government aims to launch a permanent scheme by the end of this year, subject to legislation and parliamentary time.
“While there is uncertainty over how global events will impact the price of oil, our report shows fuel margins remain high compared to historic levels despite lower prices at the pump in recent months,” said CMA senior director of markets Dan Turnbull.
“The government committed to launching a ‘fuel finder’ scheme following our recommendation to help drivers compare real time prices and boost competition. Once launched, it will make it easier than ever to shop around and find the best deals.”
The AA president Edmund King said: “Once again, the CMA has exposed boosted margins and profits from petrol and diesel. Road fuel is a critical part of a consumer and family budgets. Increased fuel costs have a major influence on inflation.
“While the hope is that pump price reporting, which becomes mandatory at the start of the next year, might bring about more competition, what is happening now is not only bad news for drivers and businesses but also siphoning off potential consumer spending for the likes of tourism and others.
“The AA welcomes the CMA pulling up the drains on retailer operating costs. There has long been the suspicion that these have been used as the excuse for bloated margins and profits.”
RAC head of policy Simon Williams said: “Drivers will be concerned to hear that retailer margins on fuel are still above where they have been historically and that competition remains weak.
“Given fuel is a major expense for households, and with eight-in-10 drivers dependent on their cars, it’s disappointing to see they’ve paid over the odds yet again. We have to hope the launch of the government-backed Fuel Finder scheme, due at the end of the year, will stimulate competition and finally lead to fairer pump prices.”
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