UK government meets with supermarket bosses over inflated fuel prices

Grant Shapps has met with supermarket bosses to discuss their consistently high fuel prices despite the wholesale cost of fuel falling.

The meeting comes following the publication of a report by the Competition and Markets Authority (CMA), which found that from 2019-2022, average annual supermarket margins increased by 6p per litre. Increased margins on diesel across all retailers have cost drivers an extra 13p per litre from January 2023 to the end of May 2023.

Asda’s fuel margin target in 2023 was also found to be more than three times what it had been for 2019 – and Morrisons doubled their margin target over the same time period. 

The report states that other retailers, including Sainsbury’s and Tesco, did not respond in the expected manner in a competitive market and instead raised their prices in line with these changes.

Asda has even received two fines from the CMA, each valued at £30,000, for failing to respond to a compulsory written request for information and for sending a representative to a CMA meeting who was not equipped to provide appropriate evidence. Asda has now provided the CMA with the required information.

New fuel finder scheme

To help consumers budget better as the cost of living crisis rages on, the CMA has recommended a new fuel finder scheme be introduced to give drivers access to live, station-by-station fuel prices on their phones or sat navs.

The proposals are the key recommendations by the CMA to the UK government following its in-depth study into the road fuel market. Shapps is expected to tell the fuel retailers he intends to pass legislation to enforce the scheme – and if imposed, this could mean big savings for SMEs with commercial vehicles and fleets.

“High fuel prices are adding cost pressure during an already difficult economic environment,” Martin McTague, national chair for the Federation of Small Businesses (FSB) told Startups. 

“Thanks to our successful lobbying campaign earlier this year, a fuel duty freeze was extended to allow SMEs to prioritise growth. However, the apparent failure of supermarkets to pass on wholesale price reductions is a letdown to their small business customers.

“Our latest Small Business Index (SBI) shows that a total of 92% of small businesses have grappled with escalating costs over the last year, with fuel prices affecting a hefty 40% of them. If prices at the pump remain high, businesses such as florists, tradespeople and taxi drivers that are dependent on fuel can feel the brunt of the impact.

“Bringing it down wouldn’t just lighten the load for these businesses, but also put more money back into consumers’ pockets, and avoid making inflation worse. This surge in spending power would be a lifeline for businesses striving to stay afloat amidst the tide of rising inflation and interest rates.”

Further reading:

• What is a fuel card?
• Fuel card prices: how much do fuel cards cost in 2023?
• The best fuel cards for small businesses

Kirstie Pickering - business journalist

Kirstie is a freelance journalist writing in the tech, startup and business spaces for publications including Sifted, TNW, UKTN, The Business Magazine and Maddyness UK. She also works closely with agencies such as CEW Communications to develop content for their startup and scaleup clients.