The Competition and Markets Authority (CMA) attributed the recent rise in fuel prices since 2019 to lessened competition among supermarkets.
This lack of competition, coupled with Asda’s strategic attempt to secure higher profit margins from its petrol stations, has led to drivers paying an additional 6p per litre.
To remedy the situation, the CMA announced the implementation of a new fuel finder scheme designed to help drivers identify the most affordable fuel in their vicinity. The regulator also plans to establish a supervisory entity aiming to bolster competition.
Asda received a £60,000 penalty from the CMA for not supplying pertinent information promptly during the investigation that lasted a year.
However, the CMA stated: “No evidence indicates cartel activities, and we do not intend to initiate an enforcement case.”
In an extensive statement, the AA has expressed support for the CMA’s decision. Luke Bosdet, the AA’s spokesperson for fuel prices, had this to say:
As early as 2005, we noticed irregularities when fuel prices increased by 5p per litre within days following Hurricane Katrina in August, but a subsequent 4p decrease in wholesale costs took over two months to reflect at the pumps.
Regrettably, it’s taken over 15 years for government and regulatory bodies to identify this issue and take appropriate action. Nevertheless, this long-overdue intervention is highly appreciated by UK motorists.
The CMA’s acknowledgement of substantial fuel price disparities among communities is particularly noteworthy. Concerns about this were voiced over a decade ago when local MPs protested about pump prices in their towns being 3p higher than in nearby areas.
What started as a 3p difference escalated to a 5p, then 8p disparity, and ultimately, a gap of over 10p per litre has developed between many communities since the pandemic. Supermarkets have understandably come under scrutiny for this.
Nonetheless, there were no barriers preventing non-supermarket fuel stations from undercutting these supermarkets. The majority, however, opted to follow suit, with the exception of a few outstanding rebels.
In the wake of the pandemic, the pricing imbalance has not only become evident but glaringly clear – with supermarkets in the past year charging significantly more for fuel than many smaller independents.
The stark price difference – sometimes over 10p for identical supermarket fuel in a neighbouring town – was so conspicuous that one has to wonder how supermarkets thought they could evade notice.
