Asda Petrol fuel

Asda has been fined £60,000 by competition chiefs for failing to co-operate properly with a CMA probe into fuel prices, after an investigation found competition at the pumps had “weakened” as supermarkets deliberately drove up profit margins.

However, there were no fines and there will be no further action against Tesco, Sainsbury’s and Morrisons, who were also found to have not lowered prices as they could have to help shoppers.

The regulator’s final report in its year-long investigation into the fuel market was published today, with a separate probe on competition in groceries prices set to follow in the next few weeks.

Asda was hit with two £30,000 fines for failing to respond properly to a request for information and for sending a representative to an interview who wasn’t able to answer questions about the supermarket’s pricing activities.

The report found competition in the supermarket fuel sector had been hit as Asda and Morrisons increased margins on fuel while Tesco and Sainsbury’s priced by comparison to local competitors rather than in response to cost movements in the market.

The actions led to shoppers paying 6p per litre more than they could have, the probe found.

The CMA said from 2019-22 the average annual supermarket margins had increased by 6 pence per litre. Margins increased on diesel across all retailers, costing drivers an extra 13 pence per litre from January 2023 to the end of May 2023.

The CMA today also unveiled plans for a ‘fuel finder scheme’, which it claimed would increase competition and help people find cheapest prices at the pumps. It is to be underpinned by new compulsory open data requirements and backed by a ‘fuel monitor’ oversight body.

Currently, retailers only provide information on prices at the petrol stations themselves, which the CMA said made it hard for drivers to compare prices and weakened competition.

Bosses of Tesco, Sainsbury’s, Asda and Morrisons all backed the idea of a fuel finder scheme at a cross-party hearing of MPs last week, but it will now need statutory backing through legislation to ensure fuel retailers provide up-to-date pricing.

It could then be made available to drivers through third party platforms such as satnavs or map apps, through a dedicated fuel finder app, or a combination of both.

The CMA said the new oversight body would monitor prices and margins on an ongoing basis and recommend further action if competition continued to weaken in the market.

However, the report also found that following the interim update issued by the CMA in May 2023, the average price of road fuel had fallen in large parts of the UK. And despite the lack of transparency, it found there was “no evidence” to suggest there had been cartel behaviour and said it had no plans to open an enforcement case.

“Competition at the pump is not working as well as it should be and something needs to change swiftly to address this,” said CMA CEO Sarah Cardell.

“Drivers buying fuel at supermarkets in 2022 have paid around six pence per litre more than they would have done otherwise, due to the four major supermarkets increasing their margins.

“This will have had a greater impact on vulnerable people, particularly those in areas with less choice of fuel stations.”

She added: “We need to reignite competition among fuel retailers and that means two things. It needs to be easier for drivers to compare up to date prices so retailers have to compete harder for their business.

“This is why we are recommending the UK government legislate for a new fuel finder scheme, which would make it compulsory for retailers to make their prices available in real time. This would end the need to drive round and look at the prices displayed on the forecourt and would ideally enable live price data on satnavs and map apps.”

An Asda spokesman said: “The CMA’s comprehensive road fuel market review recognised Asda as the price leader and confirmed the presence of an Asda petrol station in a local area keeps prices down for all motorists.

“Despite record inflation, we have carefully managed our business to ensure Asda was the cheapest traditional supermarket for both groceries and fuel throughout the period reviewed by the CMA and this position is unchanged.

“The penalty notices relate to two individual alleged technical breaches in the way information was shared with the CMA over a 12-month period, during which time a significant number of documents were shared with the CMA to aid their study and we engaged fulsomely with their enquiries.

“As the price leader in the supermarket fuel sector, we welcome any initiative that makes it easier for motorists to compare fuel prices, such as an app or other technology-based solutions.”