Supermarkets made an extra 6p per litre in profits on fuel last year
Supermarkets made an extra 6p per litre in profits on fuel last year by keeping prices artificially high as regulator backs introducing ‘pump watch’ scheme to bring down cost of petrol and diesel for struggling customers
Supermarkets were accused of profiteering at the expense of struggling drivers today in a damning report that says they made an extra 6p profit on every litre of fuel they sold last year by keeping prices high.
The Competition and Markets Authority (CMA) recommended that the Government introduce legislation to create a ‘pump watch’ scheme that would show local prices on sat navs and phone apps.
This would help drivers shop around more easily for the best prices locally and drive down prices overall.
The CMA found that the average supermarket fuel margins rose by 6p per litre between 2019 and 2022.
And an increase in margins on diesel across all fuel retailers cost drivers an extra 13p per litre during the first five months of this year alone.
Supermarket giant Asda has also been fined £60,000 by the CMA for failing to provide relevant information in a timely manner, the regulator revealed.
The Prime Minister’s official spokesman said: ‘It is absolutely not right that drivers aren’t getting the right fair deal for fuel and have in some circumstances been overcharged by retailers.’
New rules could be announced as soon as tomorrow as the Government begins to clampdown on businesses unfairly hammering consumers by not passing on cuts in wholesale prices.
CMA chief executive Sarah Cardell said: ‘Competition at the pump is not working as well as it should be and something needs to change swiftly to address this.
‘Drivers buying fuel at supermarkets in 2022 have paid around 6p per litre more than they would have done otherwise due to the four major supermarkets increasing their margins.
‘This will have had a greater impact on vulnerable people, particularly those in areas with less choice of fuel stations.
‘We need to reignite competition among fuel retailers.’
The idea of a pumpwatch scheme that would make it easier for drivers to find out local prices and fill up where the price is lowest has been around for some time.
It is hoped the scheme would force retails including major supermarkets to lower prices in areas where they are high, as drivers flock to lower prices nearby.
Luke Bosdet, the AA’s spokesman on pump prices, said the problem of wider margins was longstanding ands had been seen after Hurrican Katrina in 2005, when prices shot up and took a long time to come back down.
What are the cheapest petrol stations in the London area today?
These are the 20 cheapest locations for unleaded petrol price per litre in the London area, as given by PetrolPrices.com when searching with a 20-mile radius of Charing Cross:
‘Sadly, it has taken more than 15 years for a government and competition watchdog to recognise this and do something about it. However, action that is better late than never is greatly appreciated by motorists across the UK,’ he said.
‘Since the pandemic, this has become not just apparent but blindingly obvious – exemplified by supermarkets over the past year charging way more for fuel than many small independents.
‘The price difference of sometimes 10p or more for the same supermarket fuel but in a neighbouring town was so blatant that it has to be asked how the supermarkets ever expected to get away with it.’
As it stands the most well-known source for petrol price comparisons is the website PetrolPrices.com, which will allow users to search within 20 miles.
The website today showed the cheapest location within the M25 for unleaded is the Costco in Watford at 134.9p, although that is only a price for the chain’s members.
After that, Esso East Barnet Road in North London is the cheapest at 136.9p per litre, ahead of Texaco Park Deptford Service Station in South East London at 137.9p.
Also comparatively cheap are Morrisons Peckham in South East London, Esso Sandy Lane in Moor Park, Hertfordshire and the Asda in Watford – all at 138.7p.
Others can be found in South East London, including the Applegreen Camberwell Road at 138.8p, and Tesco Extra Surrey Quays and Sainsbury’s New Cross Gate, both at 138.9p.
However PetrolPrices.com limits users to 20 searches per day and will only show the cheapest options – so users cannot work out how much of a saving they could make.
Chancellor Jeremy Hunt has thrown Treasury support behind the pumpwatch scheme, telling the Sun on Sunday: ‘I am committed to getting a fair deal for motorists.
I met with watchdogs this week to work out how to reduce everyday costs. They have my 100 per cent backing to crack down on any unfair treatment.’
The Chancellor and Grant Shapps, the Energy Secretary, have previously been said to favour something like a scheme that already runs in Northern Ireland, which has been credited with reducing the average price of filling up.
According to the RAC the average cost of filling up with petrol in the UK is 143.86p per litre, and diesel 145.54p.
That is down from a peak of 191.43p for petrol and 199.07p for diesel in July last year as the war in Ukraine and other factors causes a surge in prices.
While they are now lower there is concern that motorists are still not getting the best deal from retailers.
Britain’s competition watchdog revealed in May plans to investigate whether consumers are paying more for fuel because of a ‘failure in competition’ in the supply chain and supermarkets.
Source: Read Full Article