UK Supermarkets Double Fuel Margins Amidst Lower Wholesale Prices

The UK's four largest supermarkets, Tesco, Asda, Sainsbury's and Morrisons, have doubled their profit margins on fuel since the start of the Ukraine war in February 2022, according to analysis from the RAC.

Prior to the war, their margins were 4.7p per litre, but they have since increased to around 10p per litre.

The increase is due to lower wholesale prices for fuel, which have led to lower costs for the supermarkets.

As a result, the supermarkets have increased their margins on diesel by nearly 8p this year to 15p, and have put off reducing their prices when the wholesale price tumbled.

This has led to drivers paying an extra 6p per litre for fuel last year, according to an investigation by the Competition and Markets Authority (CMA).

Asda's pence per litre fuel margin targets were three times higher this year than in 2019, and the store was fined £60,000 for failing to provide information when required.

The CMA's director of markets, Dan Turnbull, said that Asda deliberately passed on reductions in wholesale costs more slowly in areas where it had no competition.

Asda said that focusing on fuel prices alone did not give a full picture of its profits, which were "down by more than 20% year-on-year" last year.