The UK's competition watchdog has issued a stark warning that fuel retailers are maintaining 'persistently high' profit margins which cannot be explained by rising costs, suggesting motorists may be overcharged at the pump.
Watchdog Finds Unexplained High Margins
In its inaugural annual road fuel monitoring report, the Competition and Markets Authority (CMA) revealed a concerning trend. While petrol and diesel prices have fallen year-on-year, the average profit margin taken by retailers has actually increased over the past twelve months.
The CMA stated that this sustained increase in margins cannot be justified by operational cost pressures, a defence frequently cited by supermarkets and other fuel retailers. This discrepancy points directly to a lack of robust competition within the sector.
Weak Competition and the 2026 Fuel Finder
The authority concluded that competition is 'weak', meaning drivers are not seeing prices fall as much as they potentially could if the market were functioning effectively. In response to these findings, the Government is moving forward with its planned 'fuel finder' scheme, set for launch in 2026.
This new digital tool will allow motorists to compare real-time fuel prices across different retailers. The CMA has made it clear it will take action against any fuel retailers that fail to provide the necessary pricing data for the scheme.
Putting Power Back in Drivers' Hands
Dan Turnbull, the CMA's Senior Director of Markets, emphasised the significance of the report. 'Fuel margins remain at persistently high levels – and our new analysis shows operating costs do not explain this,' he stated.
Turnbull directly linked weak competition to higher prices for consumers: 'This indicates competition in the sector is weak – if it was working well, drivers could see lower prices at the pump.'
He highlighted the timing of the report, noting fuel costs are a major concern for millions of drivers travelling across the country. 'This is why the fuel finder scheme is crucial,' Turnbull added, 'it will put power back in the hands of motorists and save households money.' The report was published on Monday 22 December 2025.
