Drivers paid nearly £1 billion more in total for fuel at supermarkets last year due to increased margins at the the 'big four' chains, an investigation has found.
An inquiry carried out by the Competition and Markets Authority (CMA) found that motorists filling up their vehicles at Asda, Tesco, Sainsbury's and Morrisons paid an additional combined cost of "around £900 million", with average supermarket fuel prices rising by 6p per litre between 2019 and 2022. The watchdog's report also found that an increase in margins on diesel across all fuel retailers cost drivers an extra 13p per litre during the first five months of this year.
The Government has said that it will introduce a new law making it compulsory for fuel retailers to provide up-to-date pricing information to third parties, in response to a recommendation in the CMA's report. It's expected that this will lead to the creation of price comparison apps and websites, which will enable drivers to find the cheapest fuel in their area in real time.
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In addition, the Government has pledged to hand new powers to a public organisation in order to "closely monitor" pump prices and "alert" ministers if further intervention is needed. This is in response to another of the CMA's recommendations, with the watchdog saying in its report that a new monitoring body was needed in order to "hold the industry to account".
CMA chief executive Sarah Cardell said: "Competition at the pump is not working as well as it should be and something needs to change swiftly to address this. Drivers buying fuel at supermarkets in 2022 have paid around 6p per litre more than they would have done otherwise due to the four major supermarkets increasing their margins.
"This will have had a greater impact on vulnerable people, particularly those in areas with less choice of fuel stations. We need to reignite competition among fuel retailers."
Supermarkets have been criticised in recent months for "unnecessarily high" fuel prices, with the RAC accusing them of "taking advantage" of drivers by failing to lower their pump prices to reflect a drop in wholesale costs. The motoring organisation has repeatedly encouraged motorists to "shop around" for their petrol, with smaller independent forecourts often offering "more competitive prices".
Chancellor Jeremy Hunt said: "It isn’t fair that businesses are refusing to pass on lower prices to protect their profits while working people struggle with balancing their budgets. Consumers need to be treated fairly, and so we're empowering drivers to find the best prices possible for their fuel by taking swift steps following the CMA's recommendations."
