The Competition and Markets Authority (CMA) has found that soaring fuel prices amid the Middle East conflict are being driven by higher oil costs rather than retailers increasing margins. The watchdog said the gap between the price retailers pay for fuel and the price they sell it at has been “broadly unchanged” since the war began on February 28.
However, the CMA did identify increased fuel margins in March for “a minority of retailers” and committed to investigating these. It also noted that fuel margins in March were close to or equal to the average of 107p per litre seen last year, which shows they remain at “historically high levels” reflecting “ongoing concern about a lack of competitive pressure”.
Oil prices, which significantly affect wholesale fuel costs, hit their highest level since 2022 on Thursday, with Brent crude briefly soaring past 126 dollars (£94) a barrel. Iran’s restrictions on tankers passing through the Strait of Hormuz mean the average price of a litre of petrol and diesel at UK forecourts is 24p and 47p respectively more expensive than before the conflict started.
The CMA said “significant local price variations” mean drivers could save up to £9 for a tank of petrol or diesel by shopping around. Sarah Cardell, chief executive of the CMA, said: “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.”
Energy consumers minister Martin McCluskey welcomed the report, saying it showed most retailers acted responsibly, but added: “There are some that haven’t. We fully support the CMA in asking questions of those.” AA fuel price spokesman Luke Bosdet noted that while there was no evidence of price gouging in March, wholesale diesel costs had plummeted more than 10p a litre since early April while pump prices were down by just 2p, and a 20p gap remained between motorway and major A-road petrol prices.
