Millions of UK drivers are continuing to pay more than they should at the pumps, according to a new report from the country’s competition watchdog.
The Competition and Markets Authority (CMA) says fuel retailers are keeping prices higher than necessary, even though fuel costs have fallen over the past year.
The findings come just before the launch of a new government-backed Fuel Finder scheme, designed to help drivers find the cheapest fuel nearby and increase competition between petrol stations.
Fuel Prices Have Fallen – But Drivers Aren’t Seeing the Full Benefit
Fuel prices have eased compared with last year, largely due to lower oil prices, changes in exchange rates, and reduced refining costs.
Between November 2024 and October 2025:
- Petrol averaged 135p per litre, around 8p cheaper than a year earlier
- Diesel averaged 142p per litre, also 8p lower year-on-year
However, the CMA says drivers are not seeing the full savings because fuel retailers are still making unusually high profits on each litre sold.
Retailers’ Fuel Margins Remain “Persistently High”
Fuel margin is the difference between what retailers pay for fuel and what drivers are charged at the pump.
The CMA found:
- Supermarket fuel margins fell slightly, from 10.9p per litre in 2022 to 9.6p so far in 2025
- Non-supermarket retailers increased margins to 11.1p per litre, up from 10.8p the year before
According to the CMA, these margins remain well above historic levels.
CMA Rejects Retailers’ Cost Arguments
Fuel retailers have argued that higher wages, energy bills, and other operating costs forced them to raise prices.
However, the CMA examined these claims and found that operating profits at large fuel retailers are rising, not falling.
This directly challenges the argument that higher costs justify higher pump prices.
CMA: Competition in the Fuel Market Is Weak
Dan Turnbull, senior director of markets at the CMA, said the findings show a lack of effective competition.
He explained that if competition was working properly, drivers would be seeing lower fuel prices, especially at a time when wholesale costs have dropped.
He added that fuel costs remain a major issue for households, particularly during busy travel periods like Christmas.
Fuel Finder Scheme Aims to Cut Overcharging
The new Fuel Finder scheme is designed to give drivers more control over what they pay for fuel.
Under the scheme:
- Every petrol station must publish live fuel prices
- Prices must be updated within 30 minutes of any change
- Drivers can compare prices using sat-nav systems and apps
The system will become mandatory from February, with the CMA responsible for enforcement. Retailers that fail to comply could face fines.
Motoring Groups Welcome the Findings
Motoring organisations including the RAC and AA welcomed the report.
The RAC said the findings confirm what drivers already experience — large and confusing price differences between nearby fuel stations.
The AA said drivers are “being taken for a ride at the pumps” and hopes the Fuel Finder scheme will finally lead to fairer pricing.
Retailers Push Back Against the CMA
Fuel retailers have disputed the CMA’s conclusions.
Industry representatives argue that costs such as:
- Staff wages
- Energy bills
- Taxes
- Crime and theft
Have all risen sharply in recent years. They also point out that fuel prices are still well below the peaks seen in 2022 and 2023, suggesting competition remains strong.
What This Means for Drivers
Despite lower wholesale fuel costs, many drivers are still paying more than necessary at the pump.
The CMA believes greater transparency through the Fuel Finder scheme could help:
- Increase competition
- Reduce overcharging
- Save households money
For now, drivers are advised to shop around where possible and keep an eye on local price differences until the new system launches.