The UK competition watchdog on Monday partly blamed supermarkets for higher petrol and diesel costs, arguing that they have become less price-competitive at the pump.
The Competition and Markets Authority said it had summoned supermarket executives for formal interviews after grocers failed to be “sufficiently forthcoming” in providing evidence that they were not squeezing consumers.
The findings come after the CMA last year launched an investigation into the retail fuel market to establish if retailers were raising fuel prices unnecessarily.
The CMA acknowledged that fuel price pressures were in large part because of global factors, such as Russia’s invasion of Ukraine, but it said that increases could not be attributed solely to forces outside of retailers’ control.
“Although supermarkets still tend to be the cheapest retail suppliers of fuel, evidence from internal documents indicates that at least one supermarket has significantly increased its internal forward-looking margin targets over this period,” the CMA said.
“Other supermarkets have recognised this change in approach and may have adjusted their pricing behaviour accordingly.”
The AA motoring organisation said: “Since the pandemic, competition between forecourts has too often and in too many places been non-existent.”
Industry figures said that the so-called big four supermarkets — Tesco, Sainsbury’s, Asda and Morrisons — had become less price-competitive at the pump because they faced increased competition selling groceries from cut-price rivals such as Aldi and Lidl.
Asda and Morrisons have also both been bought out by private equity-backed investors in recent years, leaving them saddled with significant loans to service.
An Asda spokesperson said: “Asda is the price leader in the supermarket fuel sector and we remain focused on providing our customers with the best value at the pumps.” Tesco, Sainsbury’s and Morrisons did not immediately respond to a request for comment.
The watchdog also raised concerns over weaker competition in diesel, as compared with petrol, since the beginning of the year.
Earlier this month, the RAC, one of the UK’s leading motoring organisations, accused retailers of inflating the price of diesel at the pump, despite wholesale prices of the fuel having fallen below the cost of petrol.
Diesel prices in April averaged 159.4p a litre across the UK, according to the RAC, compared with 146.5p for a litre of petrol. But wholesale prices for diesel at the end of the month were 104.9p a litre, well below the 111.2p for petrol.
“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 said.
The RAC said that the CMA’s update “confirmed what we have been saying for a long time about the biggest retailers taking more margin per litre on fuel than they have in the past”.
It added: “Something badly needs to change to give drivers who depend on their vehicles every day a fair deal at the pumps.”
The watchdog will publish its final report and recommendations by the beginning of July.
