CMA: UK fuel price rise driven by oil costs, not margins

If you have been staring at rising fuel prices and wondering who is pocketing the extra money, the Competition and Markets Authority says the answer is more complicated than it first looks. In its latest road fuel market report, the watchdog says the sharp increase in prices after the Middle East crisis was mainly driven by wider cost pressures, especially higher oil prices, rather than a broad increase in fuel margins charged by retailers. That matters because it separates two different stories. One story is about global events pushing up the basic cost of fuel. The other is about whether petrol stations are adding more on top than they used to. According to the CMA, the first story explains most of the recent jump across the market as a whole, even though that will be little comfort to households and businesses still paying more at the pump.

It helps to slow down on one key term: fuel margin. This is the difference between what a retailer pays for fuel and the price it sells that fuel for. According to the CMA, average retail fuel margins were 10.3 pence per litre in February and 10.7 pence per litre in March, which is broadly unchanged and close to the average margin across 2025 as a whole. **What this means:** when petrol and diesel became more expensive, the average amount being kept by retailers did not rise in the same dramatic way. The CMA says petrol prices rose by 26 pence per litre and diesel prices by 50 pence per litre between February and 20 April, so most of that increase appears to have come from higher underlying costs rather than a market-wide jump in retailer mark-ups.

That does not mean every retailer behaved in exactly the same way. The CMA says it saw some increases in fuel margins for a minority of retailers during March. It also says it is not yet able to say precisely what caused those rises, because the detailed financial information only arrived from retailers at the end of April. This is an important piece of media literacy. An average can tell you what is happening across the whole market, but it can also hide outliers. The CMA says it will investigate those March increases further and include an update in its May report, which means this is still a live piece of scrutiny rather than a settled conclusion.

There is also a second warning in the report that should not be missed. Even before the latest conflict-driven surge, there had already been a period of higher margins in December 2025 and January 2026. The CMA says those margins averaged 12.7 pence per litre, compared with 10.0 pence per litre in November 2025, and it is still investigating what drove that earlier rise. So the picture is not simply that everything is fine because the March average was steady. The fuller picture is that recent price rises were mostly tied to oil costs, while fuel margins still remain above historic levels and parts of the market continue to raise competition concerns. You can hold both ideas at once.

Another striking finding is about local variation. The CMA says drivers could save up to £9 on a tank of petrol or diesel if they shop around. That tells you something important about the UK fuel market: even when national prices move together, what you actually pay can vary sharply from one forecourt to the next. **What this means for you:** there is no single price for fuel that everyone is paying. Local competition matters, and in some places it is not working very well. For teachers and students, this is a useful real-world example of how markets can look competitive on paper while still leaving people with very different prices in practice.

This is where Fuel Finder comes in. The scheme was recommended by the CMA and has now been introduced by the government to make it easier for drivers to compare prices before filling up. The report says third parties are already using Fuel Finder data in apps and websites, which should make it easier to spot cheaper fuel nearby. The basic idea is simple and worth knowing. If drivers can see accurate, up-to-date prices more easily, retailers face more pressure to stay competitive. The CMA says that, once Fuel Finder is more established and more widely used, it expects stronger competitive pressure on retail prices and on fuel margins too.

But transparency only works if retailers actually take part and provide accurate information. The CMA says it has begun enforcement activity and that firms which fail to register with Fuel Finder, or fail to submit accurate and up-to-date pricing data, risk fines. As a first step, it says it has sent warning letters to hundreds of forecourts that had not yet signed up. That tells you something about the CMA's role. It is not just publishing a report and hoping the market improves on its own. It is also acting as the UK's competition watchdog, using confidential revenue, cost and volume data from some of the largest firms, covering around 40% of petrol stations, to test whether price movements look justified. For drivers, the lesson is straightforward: global oil prices still matter, but so do local competition and good information. If Fuel Finder works as intended, it should become easier to avoid paying more than you need to.