Fuel margins 'persistently high' and competition 'weak', says CMA
By Michele Maatouk
Date: Monday 22 Dec 2025
(Sharecast News) - The Competition and Markets Authority said on Monday that fuel margins remain "persistently high" despite falling pump prices.
In its first annual road fuel monitoring report, the watchdog found that contrary to claims made by some fuel retailers, operating costs have not had an impact on profitability and do not explain why fuel margins remain high compared to historic levels.
The CMA noted that fuel prices for both petrol and diesel fell between November 2024 and October 2025. This was down to changes in crude oil prices, the exchange rate and refining spread. The average price of petrol was 135p per litre (ppl), 8 ppl lower than the same period a year earlier. Meanwhile, the average price of diesel was 142 ppl, also down 8 ppl.
At the same time, the report found that operating profit margins for large fuel retailers are increasing. Declining or flat operating profit margins would be expected if operating cost increases were impacting the profitability of retailers' road fuel businesses, the CMA pointed out.
"These findings challenge claims made by some fuel retailers that high fuel margins could be explained by operating costs," it said.
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. This is why the fuel finder scheme is crucial - it will put power back in the hands of motorists and save households money."
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