Petrol and diesel drivers slapped with expensive fuel costs due to 'weak competition' at pumps

Conflict in the Middle East has been identified as the largest contributor to soaring fuel prices, exonerating retailers from accusations of profiteering, according to a new report.

The latest road fuel report from the Competition and Markets Authority (CMA) states that there was "no evidence" that retailers were altering prices to take advantage of the oil crisis.

Despite this, it noted that a lack of effective competition remains a concern, with the CMA vowing to look at whether improved supply conditions were reflected in lower retail prices over the coming weeks.

Fresh data from RAC Fuel Watch states that drivers are paying an average of 159.37p per litre for unleaded petrol and 183.75p for diesel.

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Prices are starting to fall again, with diesel sinking 7.8p since its peak on April 15. Petrol prices reached their highest level at the end of May, although they have dropped by almost a penny in the days since.

Drivers are forking out £87.65 for a standard 55-litre family car when filling up with petrol, while diesel drivers are facing costs above the dreaded £100 mark (£101.06).

Since the outbreak of war in Iran, motorists across the UK have seen petrol prices rise by 20 per cent and diesel jump by 29.1 per cent.

Analysis from the CMA suggests that elevated wholesale prices continue to explain the hike in pump prices in March and April.

Other factors also played a role in higher prices at the pumps, including wholesale price volatility, supply constraints and increases in demand.

Supermarkets and other major retailers were found to have their average fuel margins stay at historically high levels, with drivers bearing the brunt of the costs.

The CMA said it remained concerned that high retail margins "reflect a continuation of the weak competitive dynamics" first identified in its report from 2023.

Sarah Cardell, chief executive of the CMA, acknowledged the impact of high fuel prices on drivers still dealing with the cost of living crisis.

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She added: "While our analysis shows the rise in wholesale prices is the main reason for higher fuel prices, we remain concerned about weak competition in the sector, leaving drivers paying more.

"Retailers should be in no doubt that we are continuing to monitor prices and margins closely and expect any reductions in wholesale prices to be rapidly and fully passed on to drivers."

Supermarkets generally remained the cheapest places to buy fuel, with motorway service stations, unsurprisingly, being the most expensive forecourts.

The CMA outlined that its next update would come in August, when conflict in the Middle East could ease and bring oil prices down around the world.

It added that it would engage directly with retailers to conduct a more detailed assessment of pricing strategies, given ongoing concerns about weak price competition.

Ms Cardell highlighted how drivers could save an impressive £9 per tank when using the Government's Fuel Finder tool, offering huge benefits.

The service shows drivers where they can find the cheapest fuel in their area, with forecourts expected to update their pricing data within 30 minutes of a change.

Labour has confirmed that it is working with its partners to ensure the pricing technology is rolled out for sat navs and other map applications so drivers can see the lowest prices while on the road.

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