CMA Finds Supermarket Profit Margins Led to Higher Fuel Prices in 2021

The report found that competition in the fuel market has weakened, with Asda and Morrisons deciding to increase their profit margins and Sainsbury's and Tesco pricing by comparison to local competitors rather than responding to cost movements in the market.

The CMA determined that there was no evidence of cartel behavior, but proposed a new legally mandated system requiring fuel providers to publish live data on fuel charges to enable consumers to see petrol station costs in real-time on their phones or GPS devices.

The government has supported this measure, and a new fuel monitoring body has also been proposed to establish the fuel finder scheme.

Morrisons has been issued penalty notices by the Competition and Markets Authority (CMA) for alleged technical breaches in the way information was shared with the CMA during a 12-month period.

Morrisons engaged fully with the CMA's enquiries and shared a significant number of documents.

The spokesperson stated that the company is "extremely competitive" on fuel pricing and that margins have increased, though they remain low.

The calculation of margin on fuel does not include the costs of running a fuel business, which have increased due to the cost of living crisis while volumes have declined since COVID.

The modest increase in fuel profitability has been important for Morrisons to invest in holding and lowering prices in store.