The Competition and Markets Authority (CMA) has warned that fuel margins remain high, despite falling pump prices in the past year.
In the first annual road fuel monitoring report under its new powers, the CMA found that operating costs have not impacted fuel retailers’ profitability and do not explain why fuel margins remain high compared to historic levels.
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.
Fuel prices across the UK decreased for both petrol and diesel between November 2024 and October 2025. This trend can be explained by changes to crude oil prices, the exchange rate and refining spread.
The average price of petrol was 135 pence per litre (ppl) between November 2024 and October 2025, 8 ppl lower than the same period in the previous year. The average price of diesel was 142 ppl between November 2024 and October 2025, 8 ppl lower than the same period in the previous year.
The report sets out average fuel margins for supermarket and non-supermarket fuel retailers across the UK using data up to September 2025. A retailer’s fuel margin is the difference between what it pays for fuel and what it sells it at. The CMA found that fuel margins remain above historic levels, indicating that competition in the road fuel retail market remains weak.
Average fuel margins for supermarket fuel retailers on a ppl basis have trended downwards from a high of 10.9 ppl in 2022 to 9.6 ppl for the 2025 year to date (January to September 2025). However, average fuel margins for non-supermarket fuel retailers on a ppl basis for the 2025 year to date are broadly increasing, with fuel margins at 11.1 ppl compared to a margin of 10.8 ppl in the previous year.
The report finds 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.
These findings challenge claims made by some fuel retailers that high fuel margins could be explained by operating costs. This analysis uses data collected for the period between 2020 and June 2025.
The CMA also looked at the retail spread – the average price that drivers pay at the pump compared to the benchmarked price that retailers buy fuel at – between November 2024 and October 2025.
While spread analysis can give a quick overview of trends in the sector, it is a less reliable indicator of competitive intensity than individual retailers’ fuel margins. Retail spreads increase and decrease in response to the volatility of wholesale prices but should return to a normal range over time if the market is working well.
The petrol and diesel retail spreads averaged 13.9 ppl and 14.6 ppl respectively during this time. Although this is lower than the average over the previous 12-month period, petrol and diesel retail spreads remain significantly above the 2015 to 2019 averages, which were 6.5 ppl for petrol and 8.6 ppl for diesel.
