Campaigners claim motorists are being over charged when they fill up after report reveals profit margins on fuel have grown
Petrol stations have been accused of profiteering at the expense of millions of motorists.
A study by the Competition and Markets Authority concluded that fuel forecourt operators were raking in “persistently high” profit margins. The watchdog also rubbished claims put forward by industry chiefs.
The findings that drivers have been paying over-the-odds come as families fill up for long journeys over the Christmas break.
Campaigners have for long time claimed that retailers have been quick to pass on higher wholesale costs by ramping-up pump prices, but slower to push through cuts, a phenomenon often referred to as “rocket and feather pricing”.
The CMA has previously raised concerns as part of quarterly analysis of the market. However, for the first time it has now looked further at retailers’ costs to discover firms’ profit margins.
It found supermarkets’ margins on fuel doubled from 2020 to 2024, and were on track to further increase in the half year 2025, to more than 6%. Profit margins at other forecourts are even higher still, the CMA found.
The average across these non-supermarket operators mostly stayed within a range of 8% to 10% from January 2023 to June 2025, but jumped to a high of 10.6% in March 2025.
Dan Turnbull, senior director of markets at the CMA, said: “Fuel margins remain at persistently high levels – and our new analysis shows operating costs do not explain this.
“This indicates competition in the sector is weak – if it was working well, drivers could see lower prices at the pump. We know fuel costs are a big issue for drivers, especially at this time of year with millions making journeys across the country.”
The CMA is hoping a new government-led “fuel finder” scheme, expected to be launched early next year, will inject more competition by allowing drivers to check online and via apps to pinpoint the cheapest forecourts.
Its report says pump prices have reduced significantly since a market study was completed in July 2023. But it also warned retailers’ fuel margins – the difference between what they pays for fuel and sell it at – are “historically high”.
One reason previously highlighted has been the decision by supermarket giant Asda, but also Morrisons to some extent, having a less aggressive approach to pricing over recent years.
That said, supermarkets’ margins have trended downwards, from a high of 10.9p per litre in 2022 to 9.6p for 2025 year to date. But non-supermarket margins were 11.1p per litre for 2025 year to date, compared to an average of 10.8p in 2024.
Motoring group the AA said: “Since the third week of November, the wholesale cost of petrol has crashed more than 7p a litre. With the VAT at the pump, that should be a saving of 8.4p or £4.60 a tank.
“Instead, the average petrol pump price has fallen just two-thirds of a penny. This is classic ‘rocket and feather’ pricing at the pumps and the bane of UK drivers.
“This time it comes as millions of drivers take to the road for Christmas and are being overcharged for their fuel. We believe that the Government’s Fuel Finder can ultimately make a difference, but currently drivers are being taken for a ride at the pumps, as the CMA clearly illustrates.”
Simon Williams, the RAC’s head of policy, said: “Sadly, many drivers won’t be surprised to hear that they’re still paying too much for their fuel, especially judging by the complaints we receive about large price variations from area to area.
“The fuel retailers trade association has claimed that rising operating costs were the reason for average margins on petrol and diesel being higher, but this has now been clearly rejected by the Competition and Markets Authority which says these don’t explain why fuel margins remain high compared to historic levels.
“We sincerely hope the new fuel finder scheme, combined with ongoing scrutiny from the CMA, finally leads to increased competition and lower forecourt prices for drivers right across the country.”
