The Competition and Markets Authority (CMA) has determined that the recent surge in fuel prices amid the Middle East conflict is primarily due to the rising cost of oil, rather than retailers increasing their profit margins. The watchdog stated that fuel margins—the difference between the price retailers pay for fuel and the price they sell it at—have been 'broadly unchanged' since the start of the war on February 28.
Investigation into Fuel Margins
The CMA acknowledged that it did observe increased fuel margins in March for a minority of retailers and has committed to investigating these cases further. However, it noted that overall fuel margins in March were close to or equal to the average of 107p per litre seen last year, indicating that they remain at 'historically high levels,' reflecting ongoing concerns about a lack of competitive pressure in the market.
Impact of Oil Prices
Oil prices, which significantly influence wholesale fuel costs, hit their highest level since 2022 on Thursday, following reports that US President Donald Trump might escalate the conflict with Iran. The cost of a barrel of Brent crude briefly surged past $126 (£94) before retreating. Iran's restrictions on tanker movements through the Strait of Hormuz have contributed to a 24p increase per litre of petrol and a 47p increase per litre of diesel compared to pre-conflict prices.
Potential Savings for Drivers
The CMA highlighted that 'significant local price variations' mean drivers could save up to £9 on a tank of petrol or diesel by shopping around. Sarah Cardell, chief executive of the CMA, commented: 'The conflict in the Middle East has driven sharp increases in road fuel prices, putting real pressure on households and businesses across the UK. The CMA's job is to ensure these rises reflect genuine cost pressures—especially given our previous work showing competition among fuel retailers isn't as strong as it should be. That's why we've stepped up our monitoring. This scrutiny is working: on average, retailer fuel margins did not increase. We will remain vigilant to ensure any fall in costs is passed on quickly to motorists.'
