Petrol costs: Drivers nonetheless paying over the chances, says watchdog

Drivers are paying extra for gas than they need to as a result of retailers’ revenue margins stay “stubbornly excessive”, the competitors watchdog has mentioned.

The Competitors and Markets Authority (CMA) mentioned sellers’ margins – the distinction between what a retailer pays for its gas and what it sells at – remained greater than historic ranges, though gas costs have fallen since July.

It mentioned supermarkets’ margins had risen to eight.1% in August from 7% in April.

The Petrol Retailers Affiliation (PRA) mentioned sellers had been pricing gas as “low as attainable in a extremely aggressive market” whereas additionally grappling with rising prices.

However the CMA mentioned the “sustained” enhance in gas costs was regarding and there was not sufficient competitors within the gas market, which continued to drive costs up.

Non-supermarket gas margins had risen to 10.2% in August from 7.8% in April, the watchdog mentioned.

“Whereas gas costs have fallen since July, drivers are paying extra for gas than they need to be as they proceed to be squeezed by stubbornly excessive gas margins,” mentioned Dan Turnbull, senior director of markets on the CMA.

“We due to this fact stay involved about weak competitors within the sector and the affect on pump costs,” he added, particularly whereas prices of dwelling stay excessive.

“The extra individuals save on gas, the extra they should spend in different areas”, he mentioned.

The typical petrol value on the finish of October was 134.4p per litre, and for diesel it was 139.7p.

Nonetheless, the PRA’s government director, Gordon Balmer, mentioned it was essential that the rising prices dealing with retailers – notably enterprise charges, Nationwide Insurance coverage and the minimal wage – had been included in future evaluation to “give an entire image”.

“The CMA reporting that retailers proceed to pump their gas margins for additional revenue will stir anger as soon as once more – significantly when set towards the background of the federal government persevering with the gas responsibility freeze,” says Luke Bosdet, the AA’s spokesman on highway gas costs.

He added that as retailers now should pay elevated Nationwide Insurance coverage contributions, greater wages and elevated power payments, it was arduous to see what a “affordable addition” was to gas costs, and what counted as “bloated margins”.

Motoring group RAC mentioned the CMA’s findings had been “disappointing”, particularly after the regulator said in July that drivers had been overcharged on gas by £1.6bn in 2023.

“We hope the introduction of the government-backed gas finder scheme subsequent 12 months will achieve driving better competitors and allow drivers throughout the UK to profit from fairer costs”, mentioned the RAC’s Simon Williams.

The gas finder scheme will enable drivers to match real-time gas costs and is because of be launched by the top of 2025.

The government in January said the knowledge, which will likely be accessible on on-line comparability websites and navigation apps, ought to drive down costs due to the added transparency.