The PRA has hit back at the CMA’s criticism of fuel prices. In the CMA’s first monitoring report on road fuel, which was published yesterday, the consumer protection body was critical of fuel margins.

But Gordon Balmer, executive director at the PRA, said fuel retailers have had no choice but to maintain their margins to pay for the massive increases in their operating costs.

Since the report was issued, there has been a barrage of stories in the wider media about fuel retailers ‘ripping off’ drivers. The fodder for these stories came as the CMA revealed that in the period from May to August, the average fuel margins of supermarkets fell around 4.5ppl (from an average of 11.9ppl in May, compared to 7.3ppl in August). But August margins remained higher than those for any year prior to 2021.

Balmer said: “Of course, margins are higher; they have to be higher as our members face record high inflation, increases in wages, energy cost increases – albeit not as high as they were but they are still elevated – as well as record theft from drive-offs and shoplifting. Our members are reporting that they are using security guards with body cams to help deter theft. Just how are they meant to pay for all this?” Balmer also pointed to the huge debts being serviced by Asda and Morrisons, thanks to private equity investment, which would put pressure on them to retain margins.

RAC fuel spokesperson Simon Williams added fuel to the fire by saying: “It’s very disappointing that the CMA has found that major fuel retailers are still taking far bigger margins than they have done in the past, something we have been saying for a long time, as this means drivers are still being taken advantage of at the pumps. While supermarket margins may have fallen in the summer, our latest data shows they have more than made up for this since then and are currently taking very large margins.”

The CMA’s first monitoring report on road fuel shows that prices at the pump have gone up by over 11ppl while the wider data gathered on margins and spreads shows a mixed picture.

The CMA looked at fuel prices at the pump for drivers from the end of May 2023 to the end of October 2023.

Overall, while pump prices for both petrol and diesel have increased 11.1ppl for petrol and 13.9ppl for diesel since May 2023, this can be divided into two separate periods. During June, July and August, the CMA said this appears to have been driven by global factors such as increased crude oil prices. Wholesale prices then reduced in September and October while retail prices did not. “While it is too early to draw definitive conclusions, this could indicate a lack of competitive response from fuel retailers if this trend continues,” the CMA report said, adding that it will monitor these developments.

For petrol, prices have increased from 142.9ppl at the end of May 2023 to 154ppl at the end of October 2023. For diesel, pump prices at the end of May stood at 147.9ppl and had increased to 161.8ppl by the end of October.

The CMA also looked at the retail spread – the average price that drivers pay at the pump compared to the benchmarked price that retailers buy fuel at – from the end of May 2023 to the end of October 2023.

It explained that while spread analysis can give a quick overview of trends in the sector, it is a less reliable indicator of competitive intensity than individual retailers fuel margins. This is because spread analysis is based on an industry-level average price and an industry benchmark price, from which individual retailers will differ in their sale and purchase price.

During September and October, the CMA observed significant increases in retail spread for both petrol and diesel. In both cases, the retail spread at the end of October was significantly higher than the long-term average of 5-10ppl.

“While it is expected that the retail spread will increase and decrease in response to volatility in wholesale prices, over time pump prices should track wholesale prices if retail competition is effective. If retail spreads were to remain at these levels for much longer, this would cause concern about the intensity of retail competition in the sector,” said the CMA.

The CMA issued requests for information for its report from: Applegreen – Petrogas, Asda, BP, Esso, Euro Garages Ltd, Morrisons, Motor Fuel Group, Moto, Rontec, Sainsburys, Shell, Tesco and Welcome Break. It received responses fromevery company except Shell and Moto.

Balmer said the PRA was disappointed that the CMA did not include figures for more independents, especially when organisations such as RAC Fuel Watch have praised indies for lower fuel prices. Only last week a Shropshire retailer was singled out for undercutting local supermarkets by nearly 11ppl.

The CMA said it had been unable to provide fuel margin analysis for the non-supermarkets, “as it does not have a dataset that is comparable to what it was able to assemble during its market study, using its statutory information-gathering powers”.

Despite this, the CMA stated that supermarkets remain, on average, cheaper than other types of retailer, generally maintaining an average pricing gap of around 4-6ppl between supermarkets and other retailers since 2017.

In a statement about the first report, Sarah Cardell, chief executive of the CMA, said: “Drivers are feeling the pain again as petrol prices at the pump have been on the rise since June. The underlying data shows a mixed picture in terms of what is driving this. Over the summer we saw rising wholesale costs, but more recent trends give cause for concern that competition is still not working well in this market to hold down pump prices. We will be monitoring and reporting further on this in our next update.

“As our year-long, in-depth study showed, this is a market where competition is not working as well as it should. But while our first monitoring report is an important step, it is based on voluntary information and is missing some major fuel retailers. That’s why it is so important that a permanent fuel monitor – with powers to demand information from all retailers – is put in place to give a fuller picture of how the market is working.”

Separately, the temporary pricing data scheme set up by the CMA now has 12 retailers participating, representing approximately 40% of UK forecourts and more than 60% of fuel sold. The data is used by third parties such as and the AA, providing pricing information in an open, transparent manner. The UK government has committed to legislating for a mandatory, real-time pricing data scheme and will consult on it later this year.

Balmer said the PRA will continue to work closely with the CMA as it develops its permanent scheme. “With the volatility of the global fuel market, it is important that motorists are given the opportunity to search for the cheapest prices available to them. As always, I would encourage motorists to shop around to find the best deals possible.”