Petrol bosses fleeced drivers at the pumps by up to £1.6 billion last year after hiking their profit margins, a report has found.
The competition watchdog found retailers have hammered motorists while roughly doubling their margins over the past five years.
A year on from its report exposing rampant ripping-off, the Competition and Markets Authority (CMA) concluded that the sector was still ‘failing consumers’.
It said retailers’ fuel margins – the difference between what they pay and what they sell it at – were ‘still significantly above historic levels’.
The hikes collectively cost drivers around £1.6 billion last year alone, with retailers making 6p a litre more in petrol profits than they used to. Diesel profits are about 8p a litre higher.
Petrol bosses have hammered motorists while doubling their margins over the last five years, the competition watchdog found (file photo)
The practice is known as ‘rocket and feather’ pricing, when rises in the wholesale oil price are quickly passed on at the pumps but falls take much longer.
The watchdog’s investigation found that since the private equity takeover of supermarket Asda, competition in the sector has become less competitive. In turn, this has weakened rivalry and inflated prices.
Motoring groups reacted with fury to the findings.
AA president Edmund King said: ‘This hard-hitting CMA report rips the fuel market apart and reflects what we have been saying to the Government for the last decade.
‘Drivers have been taken for a very expensive ride which is even more worrying during a cost of living crisis.
‘As a nation we are dependent on road transport so uncompetitive fuel prices fuel inflation and lead to those on lower incomes cutting back on other household expenditure.’
Fuel hikes collectively cost drivers around £1.6 billion last year alone, with retailers making 6p a litre more in petrol profits than they used to
The RAC’s Simon Williams said: ‘To see that drivers have paid £1.6 billion more than they should have in the last year is nothing short of outrageous, especially when so many are dependent on their vehicles.
‘Drivers have every right to feel ripped off, especially knowing there is virtually no market competition between retailers.’
The CMA is urging the Government to use recent legislation to launch a forecourt price comparison scheme which would be mandatory for retailers, so drivers can use real-time online data to find the cheapest deal.
This could save motorists around £4.50 on an average fill-up, the CMA estimates, or more than £100 a year.
A Department of Energy spokesman said: ‘The Energy Secretary will consider the findings of the CMA’s report carefully and further updates will be set out in due course.’
