Supermarkets are ‘petrol profiteers’
Fat profit margins at the pumps add 5p a litre
SUPErMArKETS are squeezing excess profits out of motorists – adding to the pain caused by rocketing food prices – the UK’s competition watchdog has found.
Bosses from the firms will be hauled before the Competition and Markets Authority (CMA) after it found fatter profits margins at the pumps were adding 5p a litre to prices.
Its findings appear to back up accusations of ‘greedflation’ – when companies use widespread high inflation as cover to put up prices by more than is necessary.
The CMA said that while most fuel price rises were due to global factors such as the Ukraine war, it was clear they ‘cannot be attributed solely to factors outside the control of the retailers’. And it said it was particularly concerned about sustained higher profit margins on diesel.
Meanwhile, it will step up its probe into whether food and drink prices – which are rising at the fastest pace in more than 45 years – were being affected by similar issues. It comes as consumer group Which? found some supermarket meat, yoghurt and vegetable prices have doubled in a year.
Bank of England officials and economists have brushed off claims of ‘greedflation’ – suggesting companies’ profit margins have not been unduly swollen despite surging costs.
Sarah Cardell, the watchdog’s chief executive, said: ‘Although much of the pressure on pump prices is down to global factors, we have found evidence that suggests weakening retail competition is contributing to higher prices.
We are also concerned about the sustained higher margins on diesel compared with petrol.’
The CMA said evidence indicated that fuel price profit margins had increased across forecourts but particularly for supermarkets over four years. ‘As a result of these increasing margins, average 2022 supermarket pump prices appear to be around 5 pence per litre more expensive than had their average percentage margins remained at 2019 levels,’ it said.
The watchdog said it will now conduct its interviews before a final report on July 7.