RIPPED OFF: Drivers still paying too much for road fuel, says CMA

Increases in retail fuel margins cost drivers over £1.6bn in 2023

The Competition and Markets Authority (CMA) has published an update today on the widespread action it is taking to ensure that people can get the best possible choices and prices in the face of ongoing cost of living pressures.

New analysis highlights how the cost to drivers of weakened competition in the fuel sector persists, but competition in the groceries sector appears to be more effective in bearing down on retail margins.

Road Fuel 

In its third interim monitoring update, the CMA has found that:

  • Retailers’ fuel margins – the difference between what a retailer pays for its fuel and what it sells at – are still significantly above historic levels.
  • Supermarkets’ fuel margins are roughly double what they were in 2019.
  • The total cost to all drivers from the increase in retail fuel margins since 2019 was over £1.6bn in 2023 alone.
  • Competition among fuel retailers is failing consumers, just as it was in July last year when the CMA published its road fuel market study.

When the CMA published its road fuel market study report, it recommended that a smart data driven fuel finder scheme be set up to make prices available to motorists across the UK in real time, such as through map apps and sat-navs. This will be backed up with ongoing monitoring by the CMA to hold the sector to account. This scheme could save drivers up to £4.50 each time they fill up, as it would make it easier to find cheaper fuel in their area.

The CMA is currently monitoring developments in the fuel market using information provided voluntarily by fuel retailers. It has created a temporary price data-sharing scheme, and it is positive that some major players have started to integrate this into consumer-facing products, like apps. However, the current scheme covers only 40% of fuel retail sites and is not comprehensive enough to be utilised by map apps or sat-navs to bring accurate, live information to people – and this is what would have a substantial impact on the market.

The proposed introduction of the Digital Information and Smart Data Bill by the new government could provide the legislative basis to set up a compulsory and comprehensive scheme that would change this – which the CMA would welcome.

Legislation – which is needed to establish the scheme fully – may take time to come into force. So that motorists can start to benefit from quicker, easier access to fuel prices through everyday apps sooner, the CMA encourages the government to introduce an enhanced interim voluntary scheme that is as close to the final scheme as possible.

Richard Evans, head of technical services at webuyanycar comments: “Rising motoring costs are unsurprisingly taking a toll, as our research revealed 4 in 10 drivers (40%) trying to drive less as a result of expensive fuel. 

“As households unfortunately feel the pinch from rising costs across the board, there are a few things drivers can do to get the most out of their fuel. The more weight a car is carrying, the more fuel it will consume, so remove anything that isn’t needed.

“Driving habits have a huge impact on fuel consumption; making sure to accelerate gently and use the highest appropriate gear will help to use as little fuel as possible. And, keeping a car in good condition can also help to improve fuel consumption, as fuel won’t be wasted on broken parts.

Amidst the fluctuation of fuel prices, it’s also important that drivers are aware of the cost to fill up and where they can get the best deal in their local area. Drivers can use our fuel cost calculator to estimate their weekly, monthly (and even annual) fuel spend.

Groceries

Many households have been struggling to put food on the table. Last year the CMA launched a wide-ranging project looking at competition and prices in the groceries sector, to make sure that people can get the best deals possible when they are shopping for essentials.

Retailer profitability analysis

In the CMA’s review of the sector in July 2023, it did not find widespread evidence of weak competition: profit margins were historically low; consumers were switching to get the best deals; and the lowest-price retailers were gaining market share from others. But the CMA committed to have another look at this and monitor margins as costs came down. 

Overall, the updated retailer profitability analysis that the CMA has published today should provide shoppers with reassurance that competition in the groceries sector appears to be effective in bearing down on retail margins.

Grocery retailer revenues, profits and margins have increased slightly, in aggregate, in the most recent year (FY 2023/24), as inflation has eased. However, the CMA found that the average operating margin for grocery retailers was less than 3% last year, which remains below pre-pandemic levels. Overall, this does not give the CMA cause for concern about the general state of competition in the groceries sector.

Pricing  

The CMA has also been investigating a range of pricing issues, to help shoppers access clear and accurate pricing information:

  • When shoppers are looking for the best deal possible, they need to be able to easily compare the prices of similar items. Unit pricing can help with this, but a lack of consistency or accuracy can cause confusion. The CMA has identified a number of concerns with retailers’ unit pricing practices, some of which stem from the legislation itself – the Price Marking Order (PMO) 2004, which allows for inconsistences in retailers’ practices, including when products are on promotion. The CMA has recommended changes to the PMO and the Northern Ireland PMO which will help people access better information when they shop, and encourages the government to implement these changes.
  • Alongside this, the CMA has published guidance aimed at independent retailers to help them display clear and accurate prices in general.
  • Shoppers are looking for deals more than ever, and, increasingly, supermarkets offer special prices only for customers that use their loyalty schemes. The CMA has been assessing whether the savings on offer through loyalty schemes are genuine. The analysis – involving tens of thousands of loyalty price promotions – is ongoing, but the results to date suggest it is unlikely to identify widespread evidence of loyalty promotions that mislead shoppers. The CMA has commissioned a consumer survey to understand consumer attitudes and the impact of loyalty pricing on how we shop around and compare prices. The CMA will report on this work in November.

Infant formula

Infant formula is a vital part of the weekly shop for many parents and carers.

Through our review of the groceries sector, the CMA identified significant price rises for infant formula (over 25% between 2021-23) and launched a formal market study in February. Five months into the study, the CMA has concerns that the combined effect of the current regulatory framework, the behaviour of suppliers, and the needs and reactions of consumers buying formula, may be resulting in people paying more than they need to.

The CMA will publish an interim report in October setting out in full the concerns it has in this market and its provisional recommendations for action to improve it.

Sarah Cardell, Chief Executive of the CMA, said: “At a time when household budgets are under huge strain, it’s our job to make sure people can be confident they are getting good deals and that they are not being harmed by weak competition or unfair sales practices.

“Despite inflation falling to 2%, many people are still struggling to pay for everyday items – whether it’s filling up at the pump, buying groceries, feeding babies, treating ill pets, or having somewhere to live.

“Last year we found that competition in the road fuel market was failing consumers, and published proposals that would revitalise competition amongst fuel retailers. One year on and drivers are still paying too much.

“We want to work with government to put in place our recommendation of a real-time fuel finder scheme to kick-start competition among retailers. This will put the power in the hands of drivers who can compare fuel prices wherever they are, sparking greater competition.”

A full list of the CMA’s work to help tackle cost of living pressures – including any recommendations already made – can be found on its collection page.

Pothole-related breakdowns up after rainy July

New data from the AA has revealed that it received over 50,000 call outs for pothole related breakdowns in July, the highest number in five years.

Richard Evans, head of technical services at webuyanycar comments; “With more and more callouts for breakdowns likely caused by defective roads, many drivers and cars are at risk of damage from potholes.

“Our research showed that over half of drivers (54%) have had their car damaged as a result of potholes, with 40% actively avoiding routes that they know are prone to them.

“If drivers think that their tyres have burst or their car has broken down, they should try to pull over somewhere safe to avoid obstructing other road users.

Using hazard lights and if necessary a warning triangle will also help to ensure you are visible to other drivers.

“Breaking down can be a stressful and potentially dangerous experience, so it’s important to know the steps to take to keep you and your passengers safe.

“Using our tips for breakdown, drivers can find out the correct steps to take depending on which type of road they are on should their car break down.”

Government urged to take action on the UK’s worsening pothole problem 

Drivers are being warned about the worsening condition of roads across the UK, following news pothole-related breakdowns are at a five-year high.  

Experts from leading price comparison website Quotezone.co.uk are calling on the government and local councils to not let the pothole problem get even worse.

After one of the wettest months of July on record, the road’s potholes are filled with water and not visible to motorists, causing a record number of pothole-related breakdowns.

Motorists will run an increased risk of damaging vehicles by driving over potholes if UK roads are not properly maintained. 

Spending on road maintenance has almost halved since the financial crisis just over a decade ago, and the recent cost of living crisis has further reduced potholes on the priority list. 

Even temporary pothole fixtures – which involves filling the hole with a form of asphalt treatment – have also decreased by almost half in some counties. 

Credit: Shutterstock

There are also claims from members of the public that councils are not properly inspecting potholes that have been reported online. 

Several county councils have admitted that filling in potholes is no longer a priority as a result of the rising cost of living, with less funding for UK highways. 

And with an expected bad weather spell to last well into the New Year with rising levels of snow, ice and rain – it will no doubt make potholes even worse. 

With a combination of bad weather and lack of funding, the UK is likely sitting on a disaster waiting to happen and the pothole problem may soon get out of hand. 

Quotezone.co.uk are calling for councils and the government to urgently act on what is a UK wide problem.

Data shows that the worst pothole affected area in the UK is by far Northumberland with over 180,000 potholes reported over four years, followed by Cornwall and Kirklees in West Yorkshire. 

Newcastle, Liverpool and Suffolk also have some of the worst potholed roads in the UK as well as Fife and Glasgow in Scotland, and Newry, Mourne & Down joined by Armagh City, Banbridge & Craigavon in Northern Ireland. 

Greg Wilson, Founder and CEO of Quotezone.co.uk said: “We all know how bad it can be to drive down roads which are full of potholes, and unfortunately the problem does not seem to be going away.

“Most, of us have had damage caused by a pothole, or know someone that has. We are expecting a winter of extreme weather and with spending on road maintenance on the decline, we could expect to see a significant increase in pothole related claims.

“This will make UK roads more dangerous for all road users, and that’s why we’re calling on local authorities and the government to act now ahead of the worsening weather and make a start on fixing the UK’s pothole problem.”

Quotezone.co.uk helps thousands of road users each year find savings on everyday household bills and essentials such as car insurancevan insurance and motorbike insurance

New Leith webuyanycar branch confirmed

The UK’s go-to online car buying service, webuyanycar, has confirmed the opening of a new branch in Leith.

The new pod branch is now opens in the carpark of Leith’s Asda supermarket, providing better access for local customers and meeting increasing demand from motorists looking for a fast and simple way to sell their car.

The new branch is fully self-sustainable, running off solar power, and will have an entirely paperless sales process.

Richard Evans, Head of Technical Services at webuyanycar, said: “Our latest opening in Leith is testament to the continued growth of webuyanycar and our support for customers in the surrounding areas, who we have been buying many thousands of cars from over the years.

“We aim to provide our customers with even more local branches in the area, saving time, hassle and making the whole process even more convenient.”

Webuyanycar today runs more than 500 local branches nationwide, where its experts finalise purchases from car owners who have secured a free, no obligation valuation for their motor via the webuyanycar website in less than 30 seconds.

Headquartered in Manchester, the automotive firm is one of the most recognised and celebrated British brands, employing over 800 members of staff.

Richard added: “We are continuing to grow and put customers back in the driving seat, as more and more motorists realise they can negotiate a better deal by not part-exchanging. Our new Leith branch will be open five days a week and will offer instant bank transfers to motorists, saving valuable time.”

For further information and to get an instant online valuation, visit:

https://www.webuyanycar.com/