Why UK diesel and petrol prices are still sky high despite recent fall

Between June and October 2024, the price of petrol and diesel in the UK fell, but retailers' margins from each pump visit have significantly increased.

The Competition and Markets Authority (CMA) attributes this decrease in fuel prices to changes in crude oil prices and refining spreads, both influenced by global factors, as reported by City AM.

According to the watchdog, average petrol and diesel prices at the end of October were 134.4 and 139.7 pence per litre respectively, a decrease of 10.0 ppl and 10.4 ppl compared to the previous four months. Despite this drop, retailer margins remain at historic levels.

The CMA's data reveals that supermarket fuel margins rose from 7 per cent in April to 8.1 per cent in August, while non-supermarket fuel margins also increased from 7.8 per cent in April to 10.2 per cent in August. The authority expressed concern over the rise in fuel margins, suggesting that competition in the road fuel retail market remains weak.

The CMA also examined the retail spread - the average price drivers pay at the pump versus the benchmarked price retailers purchase fuel at - from July to October 2024.

Retail spreads were above the long-term average of 5-10 ppl, with petrol averaging 14.9 ppl and diesel averaging around 16.3 ppl. The watchdog highlighted that retail spreads have been above long-term averages since 2020, "indicating an ongoing lack of retail competition in the sector."

Dan Turnbull, senior director of markets at the CMA, commented: "While fuel prices have fallen since July, drivers are paying more for fuel than they should be as they continue to be squeezed by stubbornly high fuel margins."

"We therefore remain concerned about weak competition in the sector and the impact on pump prices."

"With that in mind, we are pleased the government is progressing with our recommendations."