London, Birmingham, Manchester, Bristol, Edinburgh And More: UK Drivers Face Soaring Fuel Prices Despite Falling Oil Costs—What You Need to Know

Published on December 25, 2025

UK drivers are continuing to pay excessively high prices at the pump despite a decrease in oil prices, according to a warning from the Competition and Markets Authority (CMA). The authority’s latest investigation into the fuel market has revealed that fuel margins remain inflated, even though pump prices have fallen in recent months. This has raised concerns about the fairness of fuel pricing and the profitability of fuel retailers.

The findings have been met with frustration by drivers, with many feeling that fuel costs still do not reflect the actual market conditions. The RAC, which regularly monitors fuel prices, has echoed these concerns, stating that the discrepancy between oil prices and retail fuel costs continues to be a significant issue for motorists across the UK.

The Competition and Markets Authority’s Findings

The CMA’s investigation has shown that fuel margins for both petrol and diesel remain well above historical averages. While the report acknowledges that there has been a slight decrease in fuel margins over the past year, the current figures still stand far higher than the averages seen between 2015 and 2019. In particular, the average retail spreads for petrol and diesel are 13.9p per litre (ppl) and 14.6ppl, respectively. These margins are significantly higher than the 6.5ppl for petrol and 8.6ppl for diesel recorded in the years leading up to the pandemic.

Despite a decrease in pump prices over the past year, the CMA found that these margins remain elevated. The authority concluded that operating costs, which retailers often cite as a justification for high prices, are not the driving factor behind these large margins. This contradicts claims made by fuel retailers’ trade associations, which argued that rising operating costs were responsible for higher retail margins. Instead, the CMA’s report highlights that fuel retailers have continued to enjoy rising operating profit margins.

Fuel Retailers: Supermarket vs Non-Supermarket Margins

When comparing supermarket and non-supermarket fuel retailers, the findings show different trends. Supermarkets, which are known for offering cheaper fuel, saw a slight decrease in their average margin, falling from 10.9ppl in 2022 to 9.6ppl in 2025. However, non-supermarket retailers have seen an increase in fuel margins, with the year-to-date average for 2025 sitting at 11.1ppl, compared to 10.8ppl in 2024.

These trends suggest that, while supermarkets are reducing their margins slightly, non-supermarket retailers are continuing to increase theirs. This disparity in margins is concerning, particularly for those motorists who rely on smaller, independent retailers for their fuel. The growing gap between supermarket and non-supermarket fuel pricing further complicates the landscape for drivers, with many feeling the pinch at the pumps.

The Impact on Business and Travel for UK Tourists

For business travelers and tourists, high fuel prices have a direct impact on travel costs, especially for those relying on private transport or rental vehicles. The continued high margins, despite falling oil prices, are contributing to increased travel costs across the country. Motorists are facing higher-than-necessary fuel bills, which affects both business trips and leisure travel.

For tourists, particularly those driving long distances or renting cars during their stay in the UK, the excessive cost of fuel could significantly increase their travel budgets. While major tourist destinations remain accessible by public transport, many visitors rely on rental cars for flexibility and convenience. Higher fuel costs, coupled with the uncertainty over fuel pricing, could lead to more expensive holidays for those planning to explore the UK by car.

Business travelers, particularly those in industries that rely heavily on transportation, such as logistics or sales, are also feeling the effects of inflated fuel prices. With higher margins continuing, transportation companies and independent contractors may find their operating costs rising, which could eventually be passed on to customers.

Key Points to Remember:

• High Fuel Margins: The CMA’s investigation has found that fuel margins remain high despite falling oil prices, with petrol and diesel margins still considerably higher than historical averages.
• Supermarket vs Non-Supermarket: While supermarket retailers have slightly reduced their margins, non-supermarket retailers have seen an increase in their fuel margins, making it more expensive for drivers to fill up at smaller, independent retailers.
• Rising Costs for Travelers: For UK tourists and business travelers, high fuel margins mean that car rental costs and fuel expenses are significantly higher than they should be, adding to the overall cost of travel.
• Operating Costs Not to Blame: Contrary to claims by fuel retailers, the CMA found that rising operating costs were not the primary reason for high fuel margins, highlighting the ongoing issue with fuel pricing.
• Continued Scrutiny: With the CMA continuing to monitor the situation, drivers and travelers hope that increased competition and greater transparency in fuel pricing will eventually lead to lower prices at the pump.

Travel Tips for Tourists and Commuters:

1. Consider Public Transport: If you’re visiting the UK, consider using public transport for your travels to avoid the high costs of fuel. Most major cities, including London, Manchester, and Birmingham, have extensive public transport networks.
2. Use Fuel Price Comparison Apps: For those who need to drive, use fuel price comparison apps to find the cheapest stations in your area. These apps can help you save money by directing you to stations with the lowest prices.
3. Plan Longer Journeys Wisely: If you’re planning a road trip or long journey, plan your route to avoid unnecessary detours and to take advantage of lower-priced fuel stations.
4. Choose Rental Cars with Fuel Efficiency: When renting a car, opt for more fuel-efficient models to minimize the impact of high fuel prices on your overall travel expenses.
5. Refuel During Off-Peak Hours: Fuel prices can fluctuate throughout the day. Refuel early in the morning or later in the evening to avoid peak pricing periods.
6. Monitor Price Trends: Stay updated on fuel pricing trends by checking local news and government resources for insights into fuel pricing and potential changes.

Conclusion: The Ongoing Issue of High Fuel Margins in the UK

The UK’s ongoing issue with high fuel margins, despite falling oil prices, remains a major concern for both everyday motorists and travelers. The findings from the Competition and Markets Authority reveal that fuel prices are not aligned with market conditions, leading to excessive charges for UK drivers. With the ongoing scrutiny from the CMA and growing calls for increased competition, many hope that these inflated prices will eventually come down.

For tourists and business travelers, these high fuel margins are impacting the cost of travel, particularly for those relying on cars to get around. While the government and fuel industry work towards solutions, it remains essential for travelers to plan ahead and stay informed about pricing trends. With proper planning and the right tools, motorists can minimize the financial impact of high fuel costs during their trips.

Disclaimer: The Attached Image in This Article is AI Generated