Investigation into supermarket fuel margins by CMA
The UK’s Competition & Markets Authority is set to investigate supermarket fuel margins. The CMA will hold formal interviews with supermarket chiefs in the UK to assess if supermarket fuel price increases were not just due to global factors outside of their control.
The move comes after the CMA was dissatisfied with supermarket responses and engagement in respect of its Road Fuel Market Study.
The CMA says that while evidence showed that the majority of fuel price increases are due to global factors, such as the Russian invasion of Ukraine, indications are that higher pump prices cannot be attributed solely to factors outside the control of the retailers.
According to the CMA’s Road Fuel market study, the higher prices at the pumps appear partly to reflect some weakening of competition in the road fuel retail market.
In its update the CMA said: ““While the level of engagement with the study has varied across supermarkets, we are not satisfied that they have all been sufficiently forthcoming with the evidence they have provided.
“In particular, important information has only been received late in the day and after several rounds of information gathering. Given the concerns we have about a market of such importance to millions of drivers it is vital we get to the bottom of what is going on.
”While some degree of variation in diesel retail margin is to be expected given the high levels of volatility in diesel wholesale prices, the high margins in 2023 appear to have gone on longer than would be expected.”
The CMA added that it needs to be clear whether weaker competition is part of the explanation for this.
PRA executive director Gordon Balmer said: “The CMA have made supermarkets the focus of their update, noting only that non-supermarket retailers are traditionally price followers in the market.
“As noted by the CMA, petrol and diesel prices are still volatile due to the ongoing war in Ukraine. The market is very dynamic and independent forecourts are in many cases undercutting supermarkets on price. Our advice to motorists remains to shop around.
“We have cooperated with all of the CMA’s requests for information and will continue to do so as they prepare their final report to be released.”
The CMA is expected to complete its report by 7th July.