Despite recent decreases in UK petrol and diesel prices, the Competition and Markets Authority (CMA) reports that fuel margins remain high, indicating weak competition in the road fuel retail market.
This situation affects UK drivers by keeping pump prices elevated, impacting household budgets and business operations.
Current State of UK Fuel Prices
In May 2025, UK petrol prices averaged 132.0p per litre, while diesel stood at 138.4p per litre.
Although these figures represent a decrease from February levels, the retail spreads for both fuels are more than double their averages from 2015-2019.
This highlights ongoing inefficiencies within the market that continue to affect consumers.
Market Dynamics and Competition Issues
The CMA’s report underscores that despite falling crude oil prices, fuel margins for supermarkets and non-supermarkets remain high.
Non-supermarket margins peaked at 10.4% in March 2025, surpassing those of supermarkets.
This disparity suggests varying levels of competition within the sector, contributing to sustained high prices at the pump.
Government Initiatives to Address High Margins
The government plans to launch a ‘fuel finder’ scheme by the end of 2025 to empower drivers with real-time price comparisons via apps and tools.
This initiative aims to stimulate competition among retailers by making it easier for consumers to shop around for better deals on fuel.
Potential Savings for Consumers
- The ‘fuel finder’ app could help drivers save money by providing easy access to competitive pricing information.
- Enhanced transparency may encourage retailers to lower their margins in response to increased consumer awareness.
- The scheme aligns with broader efforts under the Digital Markets, Competition and Consumers Act 2024 to monitor fuel prices more effectively.
Effects on Businesses and Households
The persistence of high fuel margins has significant implications for both households and businesses reliant on road transport.
For small businesses with vehicle fleets, elevated fuel costs can impact profitability and pricing strategies despite global oil price drops. Similarly, everyday commuters face higher commuting expenses due to sustained pump prices.
A Closer Look at Retail Spreads
| Year Range | Petrol Spread (Pence/Litre) | Diesel Spread (Pence/Litre) |
|---|---|---|
| 2015-2019 Average | 6.5 | 8.6 |
| March-May 2025 Average | 15.4 | 18.8 |
CMA’s Role in Monitoring Fuel Prices
The CMA’s new statutory monitoring powers under the Digital Markets, Competition and Consumers Act 2024 enable ongoing scrutiny of fuel prices across the UK market.
Dan Turnbull from CMA emphasized that while global oil price fluctuations create uncertainty, maintaining high margins is not justified given recent price trends at pumps.
“While there is uncertainty over how global events will impact the price of oil, our report shows fuel margins remain high compared to historic levels despite lower prices at the pump in recent months,”
said Dan Turnbull, Senior Director of Markets at CMA.
Additional Reading
Bottom Line
The persistent issue of high fuel margins amidst falling crude oil prices continues affecting UK consumers’ finances significantly.
Both households’ budgets as well as business operations relying heavily upon transportation services suffer consequences alike until effective measures like ‘fuel finder’ schemes come into play potentially alleviating some burdens faced today!
Discover more of Todays Top Breaking Government News Stories!
Sources: UK Government, Competition & Markets Authority, and HeyCar UK Fuel Prices.
This article was prepared by Ivan Alexander Golden, Founder THX News™, an independent news organization delivering timely insights from global official sources. Combines AI-analyzed research with human-edited accuracy & context.
