The "big four" supermarkets that dominate fuel sales in the UK have more than doubled their profit margins at the pumps since the Russian invasion of Ukraine, new reasearch claims.
The analysis by the RAC follows the news earlier this week of a surprise fall in consumer price inflation to 7.9%, driven in part by a decline in petrol and diesel prices. The motoring campaign group said this could have been even lower had the supermarkets reduced their pump prices in line with cheaper wholesale costs.
“Our analysis of wholesale and retail prices reveals the big four supermarkets have benefitted considerably on the back of the dramatic wholesale market fluctuations caused by the start of the war in Ukraine," spokesman Simon Williams said.
READ MORE: Petrol prices: Supermarket bosses told 'enough is enough'
“They appear to have capitalised on petrol in the early months of the war by upping their margin by 5p a litre in 2022, while they have increased their margin on diesel by nearly 8p this year to 15p by putting off reducing their prices when the wholesale price tumbled. Frighteningly, this is twice the average supermarket margin on diesel from 2019 to 2022."
According to the RAC the supermarket giants of Tesco, Sainsbury's, Asda and Morrisons were making an average profit margin of 4.7p per litre of fuel prior to the war in Ukraine - 3.7p for petrol and 5.7p for diesel. Since then those margins have increased to 9.3p for petrol and 10.8p for diesel for an average of 10p per litre.
The group's Fuel Watch data shows that in July of last year the margin on supermarket petrol hit a peak of 20p in the weeks after a new pump price high of 191.5p was recorded. So far this year they have averaged a profit margin of 15p on diesel due to the wholesale price falling significantly and then not being fully passed on to drivers in the forecourts.
READ MORE: Petrol prices: Supermarkets overcharged drivers watchdog finds
In concluding a study into the road fuel market, the Competition and Markets Authority (CMA) said consumers were paying “generally higher prices” than four years ago and noted that “competition has been significantly weaker on diesel than on petrol”. The watchdog has recommended the launch of an “open-data fuel-finder scheme” and a separate fuel monitoring body which the UK government has said it will implement.
Under questioning by MPs in June, Morrisons chief executive David Potts admitted that supermarkets have increased profits at the petrol pumps. Sainsbury's chief executive Simon Roberts has more recently suggested that higher petrol prices are helping to keep food prices lower in stores.
“We hope artificially high pump prices will become a thing of the past due to the actions promised by the government resulting from the Competition and Markets Authority report earlier this month that showed supermarkets had overcharged drivers to the tune of £900 million last year," Mr Williams of the RAC added.
"Their recommendation that a price monitoring body is set up and that retailers are mandated to provide live prices for fuel finder apps is very welcome and long overdue."
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