Data from the RAC has unveiled that the UK’s major supermarkets have significantly increased their profit margins on fuel following Russia’s invasion of Ukraine last year.
The profit margins for petrol surged from 3.7ppl (pence per litre) to 5.7ppl while margins for diesel escalated from 5.7ppl to 9.3ppl since the war began.
In the wake of a notable decrease in the wholesale cost of fuel, the pump price of fuel was not adjusted accordingly. Consequently, profit margins reached 20ppl shortly after the pump price peak of 191.5p on 3 July 2022.
This led to supermarkets achieving an average profit margin of 15ppl.
CMA report highlights supermarket fuel price inflation
The Competition and Markets Authority (CMA) report unveiled that fuel prices rose by an average of 6p per litre last year as supermarkets capitalised on weakened competition and inflated pump prices.
Asda and Morrisons, the two cheapest fuel sellers, were particularly highlighted for their decision to target higher margins during this period.
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In response to the findings, the CMA suggested a “fuel finder scheme” to provide drivers with live, station-by-station fuel prices on their phones or sat-navs.
The CMA proposed the establishment of a new monitoring body to hold the industry accountable and ensure fair pricing practices.
The hope is that these measures will reintroduce healthy competition among fuel retailers, ending drivers being overcharged at the pumps. RAC fuel spokesman Simon Williams expressed concern that drivers may have lost nearly £1bn ($1.3bn) due to increased retailer margins on fuel, emphasising the urgency for action to protect consumers and ensure fair pricing.