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UK Watchdog Says Drivers Paying More For Fuel Due To ‘Big Four’ Supermarkets

By  |  July 3, 2023
UK Watchdog Says Drivers Paying More For Fuel Due To ‘Big Four’ Supermarkets

In the UK, drivers have been paying more for their fuel than they would have prior to 2019 – around 6 pence per litre more at supermarkets – and according to the Competition and Markets Authority (CMA), the ‘big four’ supermarkets are to blame. Finance Minister Jeremy Hunt emphasised that when their customers are feeling the pinch, retailers shouldn’t be taking advantage and overcharging for fuel. Whilst Asda and Morrisons have been held responsible for the weakened competition, Tesco and Sainsbury’s have also been criticised for not responding competitively.

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    In light of the findings, the UK government plans to introduce the ‘fuel finder scheme’, which would assist drivers in finding the best prices. Furthermore, the government is set to change the law so that live fuel prices at each petrol station are accessible via phones and in-car software. To ensure that the industry is held to account, the CMA suggested the creation of a road fuel prices monitoring body which the government has supported.

    Read more: UK Moves Closer To Big Four Accountancy Breakup

    As for Asda, the CMA found them culpable of failing to provide relevant information in a timely manner. As punishment, Asda have been given a hefty fine of 60,000 pounds ($76,000).

    The CMA’s study also found that increased margins on diesel across all retailers had cost drivers an extra 13 pence per litre (PPL) from January 2023 to the end of May 2023. A typical family car could save up to £4.50 a tank within a 5-minute drive by shopping around for the best deal, and the CMA estimates that drivers have paid 13 PPL more for diesel than if margins had been at their historic average.

    To ensure drivers get a fair deal, the CMA is recommending the UK government implement the ‘fuel finder open data scheme’. This scheme would make it compulsory for retailers to provide up-to-date pricing and make that easily accessible to drivers. To make sure this application is being enforced, there would be a new ‘fuel monitor’ body to monitor prices and margins on an ongoing basis. Sarah Cardell, Chief Executive of the CMA said: “Competition at the pump is not working as well as it should be and something needs to change swiftly to address this.”

    The findings from the CMA investigations demonstrate the need for the government to legislate for the fuel finder open data scheme as soon as possible, otherwise vulnerable people will continue to overpay for fuel. This scheme would not only help drivers shop around to get the best deal, but it would also provide them with the information they need to make an informed choice.

    Supermarkets are typically the most competitive place to fill up, however the findings from the CMA investigation have identified significant price differences in different areas of the country. There can also be huge discrepancies between petrol stations, with motorway service stations charging around 20 PPL more for petrol and 15 PPL more for diesel compared to other fuel stations.

    Fortunately, due to the CMA investigations, drivers now have access to live prices across petrol stations in the UK. Supermarkets and retailers must comply with the law, or else face the consequences, as Asda has been fined with 60,000 pounds for failing to provide relevant information in a timely manner.

    The UK fuel market has been a source of contention for drivers for some time, with some being taken advantage of due to lack of information. With the installation of the fuel finder open data scheme and the new road fuel prices monitoring body, drivers will now be able to find the best fuel prices in the area and help them avoid overpaying. Driver confidence is likely to increase and finally, there can be fair competition in the market.