The UK's competition watchdog has warned that many fuel retailers are not passing on wholesale price falls quickly enough to drivers, with more than 1,000 warning letters sent over failures to register with a new price comparison scheme.

The Competition and Markets Authority (CMA) raised concerns in its latest quarterly update on the fuel market over what it called "passive pricing strategies" used by the majority of retailers, which it said were helping to keep profit margins high amid soaring cost pressures on drivers from the Iran war.

The CMA found that some retailers did not immediately pass on falls in wholesale diesel prices to drivers between May and June, which could have boosted competition in the market. While costs overall fell at fuel pumps in June, prices remained significantly higher than before the Middle East conflict, and retailer profit margins were either at or above the historically high levels of 2025, the CMA said.

The watchdog did not find any evidence of profiteering among fuel retailers on the back of the war in Iran.

Enforcement and registration

The CMA also said it had sent 1,166 letters to retailers and 53 compliance notices since April about failure to register with the government-run Fuel Finder price comparison scheme. It said about 97% of petrol stations are registered with the scheme, which account for about 99% of the fuel sold in the UK, and it had not yet had to issue any fines.

The Fuel Finder scheme, launched by Labour earlier this year, requires petrol stations to publish their live prices from February 2, with updates within 30 minutes of any price changes. The scheme was created on the back of a CMA recommendation in July 2023, after the watchdog found competition among retailers had weakened since 2019, with drivers paying nearly £1bn more for fuel during the previous year because of increased margins.

The CMA said it would carry out a more detailed review of the road fuel market in the autumn to ensure customers were paying a fair price for fuel across the UK.

Reactions

The CMA's chief executive, Sarah Cardell, said: "We know prices at the pump are putting real pressure on drivers' pockets and our monitoring plays an important role in giving drivers confidence that retailers are not taking advantage of the conflict in the Middle East."

"We will continue to monitor prices and margins closely and expect any reductions in wholesale prices to be rapidly and fully passed on to drivers," she added. "In the meantime, Fuel Finder can help drivers save money when they fill up."

The AA's president, Edmund King, said: "Some fuel retailers are sending to pass on lower costs promptly and help their customers, but many more, including large numbers of supermarkets, are not." He praised Fuel Finder as a "start in getting drivers to fight back against stubbornly high pump prices."

The RAC's head of policy, Simon Williams, said: "It's very concerning that margins on fuel remain historically high and some retailers did not reduce prices as quickly as they should have when the diesel wholesale price fell." He urged the watchdog to compare fuel retailing in Northern Ireland with the UK, as petrol and diesel are currently being sold there for an average of 8p less a litre.

The CMA said its experience to date is that registration issues are generally resolved quickly through informal engagement with retailers, contributing to high levels of registration across the market. It stressed that it is prepared to take "proportionate enforcement action" if some petrol and diesel stations continue to evade the rules.