‘Nothing has changed’: Supermarkets back in the firing line for jacking up pump prices
Supermarkets are still profiting at the expense of British motorists, despite damming criticism from the UK’s competition regulator.
This summer it highlighted that weakened competition was behind jacked up pump prices. Margins on petrol at the ‘big four’ supermarkets, which include Tesco, Sainsbury’s Asda and Morrisons, were more this years’ average in October and more than triple 2019’s, according to motoring group the RAC.
The average fuel retailers margin on unleaded was more than 16p a litre before VAT last week as global oil prices sat at $90 per barrel.
“This is in stark contrast to the long-term average of 7p a litre and is far higher than the 10p margin that smaller, independent retailers argue is now fair due to inflation,” the RAC said.
Diesel, which is currently averaging 162p across the country, is “overpriced” by around 4p per litre, it added.
The motoring organisation today urged the UK’s biggest fuel retailers to slash the price of petrol by at least 5p a litre to 150p, to reflect their lower wholeslale costs.
Their findings come despite political pressure this summer following a year-long investigation from the Competition and Markets Authority (CMA), which found that increased supermarket profit margins had led to drivers paying almost £1bn more for fuel last year.
This prompted political pressure from the former Energy Secretary Grant Shapps, who vowed to slam “the brakes down on the mistreatment of motorists.”
The RAC said its new findings were “very concerning” given the events of summer, adding that “history already appears to be repeating itself.”
RAC fuel spokesman Simon Williams said: “Our analysis sadly shows that despite the Competition and Markets Authority’s investigation confirming drivers were being ripped off at the pumps – something we have been saying for years – and the government acting on the findings, nothing has changed.”
“Drivers are still losing out massively when wholesale prices come down. But in Northern Ireland, where the supermarkets don’t dominate fuel, retailing drivers are getting fairer deal with a litre of unleaded costing 150p and diesel 157p – 5p less than the UK average.”
Following its verdict in early July, the CMA recommended a new fuel monitoring body be introduced to “hold industry to account,” alongside legislation to make fuel retailers provide up to date data on pricing.
“We badly need the government to set up the price monitoring body recommended by the CMA and for it to carry powers to take action against big retailers that don’t reflect downward movements in the wholesale market such as we’ve been experiencing in the last six weeks,” Williams said.
A Department for Energy Security and Net Zero spokesperson said: “We have been clear with fuel retailers that they need to pass on savings at the pump as quickly as possible. We will be monitoring prices closely to ensure that this happens.”
“Soon, all fuel retailers will have to release their prices by law, and this will help motorists find the best deals.”
The big four were approached for comment. Trade body the British Retail Consortium was also approached.