Asda, Tesco Sainsbury's and Morrisons have doubled their fuel margins since the start of Ukraine war

The UK’s major supermarkets have doubled their margins on fuel since the start of the Ukraine war, new analysis shows.

Data from the RAC reveals that on average, Asda, Sainsbury’s, Tesco and Morrisons have extended their margins on petrol and diesel from just under 5p per litre prior to the Russian invasion in February to just below 10p per litre now.  

RAC Fuel Watch data for 2022 shows that the margin on supermarket petrol averaged almost 11p (10.8p) a litre, hitting 20p in the weeks after pump prices reached an all-time high of 191.5p in July. While that margin on petrol has since slumped back to to 6.3p in 2023, the retailers have seen their margins on diesel explode since. 

So far this year, they have enjoyed an average margin of 15p per litre on diesel as they fail to pass on wholesale price drops to customers at the pumps. 

The latest revelations comes after the Competition and Markets Authority (CMA) told MPs that Asda had tripled its fuel profit margins since 2019 and in the wake of a wider CMA report which said weakened competition among the supermarkets had led to drivers being overcharged to the tune of £900 million since 2019. 

The RAC data shows that the supermarket chains have gradually been extending their margins since 2016 but took advantage of last year’s market volatility to ramp them up sharply. In 2016 the supermarket margin on a litre of fuel was 2.3p. This increased steadily to 5.7p in 2019 and remained at that level through the pandemic. But in 2022 it jumped by 54% to over 9p a litre and, is now at almost 11p this year.

RAC fuel spokesman Simon Williams said: “Our analysis of wholesale and retail prices reveals the big four supermarkets have benefited considerably on the back of the dramatic wholesale market fluctuations caused by the start of the war in Ukraine.

“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.

“While we accept the cost of running forecourts might have increased, these bloated margins must make difficult reading for the millions of drivers who are already battling the rising cost of living.”

Williams added that he hoped the fuel price tracker recommended by the CMA would help tackle “artificially” high pump prices but said he didn’t think drivers would see significant improvements until an official wholesale price monitoring body was set up and given the power to penalise companies that don’t fully pass on wholesale price drops to customers.