London, December 22, 2025 — The UK Competition and Markets Authority (CMA) has found that fuel margins remain “persistently high” and are not explained by retailers’ operating costs, despite pump prices falling over the past year, according to its first annual road fuel monitoring report published under new statutory powers.
The CMA said its analysis shows competition in the road fuel retail market remains weak, with fuel margins staying well above historic levels even as wholesale costs have declined. The report covers developments in the market up to October 2025 and builds on the CMA’s earlier road fuel market study.
Falling Prices, High Margins
Between November 2024 and October 2025, average UK pump prices fell for both petrol and diesel. Petrol averaged 135 pence per litre (ppl), while diesel averaged 142 ppl — both around 8 ppl lower than in the same period a year earlier. The CMA said these declines were largely driven by movements in crude oil prices, exchange rates, and refining spreads.
However, the authority found that fuel margins — the difference between what retailers pay for fuel and what they charge motorists — remain elevated. Supermarket fuel retailers’ margins fell from a peak of 10.9 ppl in 2022 to 9.6 ppl in the year to date (January to September 2025), but remain above pre-2020 levels. Margins for non-supermarket retailers increased to 11.1 ppl over the same period, up from 10.8 ppl a year earlier.
Operating Costs Not the Cause
The CMA said claims by some fuel retailers that higher margins reflect rising operating costs are not supported by the evidence. Its analysis shows operating profit margins for large fuel retailers have increased between 2020 and June 2025. If operating costs were driving higher margins, profit margins would be expected to fall or remain flat.
The CMA also examined retail spreads — the difference between pump prices and benchmark wholesale prices — and found petrol and diesel spreads averaged 13.9 ppl and 14.6 ppl respectively between November 2024 and October 2025. While lower than the previous 12-month period, these levels remain significantly above pre-pandemic averages.
Fuel Finder and Enforcement
The authority reiterated the importance of the forthcoming “fuel finder” scheme, which will require retailers to provide real-time price data so drivers can compare fuel prices via apps and comparison tools. The CMA said the scheme, due to launch next year, should boost competition by making it easier for motorists to shop around.
Alongside the report, the CMA published new enforcement guidance setting out how it will oversee compliance with fuel finder regulations. The authority said its initial focus, through at least May 2026, will be on supporting compliance rather than immediate enforcement action, though it has powers to impose fines for breaches.
Dan Turnbull, senior director of markets at the CMA, said the findings show competition in the sector is not working as it should, adding that stronger price transparency is needed to put pressure on retailers and deliver lower prices for drivers.
