And it has rejected claims from retailers that rising operating costs are to blame for the increase in their margins.

The findings of overcharging, which have been welcomed by the RAC and AA, come as millions of drivers take to the road for Christmas.

The revelations come ahead of the launch of a new government-backed ‘Fuel finder scheme’, which is designed to help people find the cheapest places to fill up and so boost competition. In its first annual road fuel monitoring report, the CMA found that drivers are suffering because competition in the fuel market is “weak”.

Fuel prices have eased over the past year, driven by changes in oil prices, exchange rates and refining costs.

Between November 2024 and October 2025, the average price of petrol was 135 pence per litre (ppl) – 8 ppl lower than the same period a year earlier and the average price of diesel was 142 ppl – also 8 ppl lower year-on-year

However, the CMA says the benefit to drivers has been limited because retailers’ margins remain elevated. Average fuel margins for supermarkets fell from a peak of 10.9 ppl in 2022 to 9.6 ppl in the 2025 year to date (January to September).

But margins at non-supermarket retailers rose to 11.1 ppl, up from 10.8 ppl the previous year. The watchdog said these margins are still well above historic norms.

The CMA examined claims from retailers that higher wages, energy and other costs were forcing them to charge more.

However, it found operating profit margins at large fuel retailers are increasing, not falling – directly undermining the argument that higher costs justify higher pump prices.

Dan Turnbull, senior director of markets at the CMA, said: “Fuel margins remain at persistently high levels – and our new analysis shows operating costs do not explain this. This indicates competition in the sector is weak – if it was working well, drivers could see lower prices at the pump.

“We know fuel costs are a big issue for drivers, especially at this time of year with millions making journeys across the country. This is why the fuel finder scheme is crucial – it will put power back in the hands of motorists and save households money.”

The fuel finder scheme will force every petrol station in the UK to publish live pump prices, allowing drivers to compare the cheapest places to fill up using sat-navs and price comparison apps.

Fuel retailers will be legally required to update prices within 30 minutes of any change, making it easier for motorists to avoid overpaying. Compulsory real-time price reporting starts in February and the CMA will police the system and can fine firms that fail to comply. The RAC’s head of policy Simon Williams said drivers will feel the CMA’s findings simply confirm what they experience every day.

He said: “Sadly, many drivers won’t be surprised to hear that they’re still paying too much for their fuel, especially judging by the complaints we receive about large price variations from area to area.

“The fuel retailers trade association has claimed that rising operating costs were the reason for average margins on petrol and diesel being higher, but this has now been clearly rejected by the CMA which says these don’t explain why fuel margins remain high compared to historic levels.

“We sincerely hope the new fuel finder scheme, combined with ongoing scrutiny from the CMA, finally leads to increased competition and lower forecourt prices for drivers right across the country.”

The AA said: “Drivers are being taken for a ride at the pumps, as the CMA clearly illustrates.”

Gordon Balmer, the executive director of the PRA, challenged the CMA’s findings, saying: “Operating costs alone do not account for higher fuel margins, yet retailers continue to face steep rises in labour, taxation, energy and crime.

“Comparisons with historic margins overlook these significant cost increases. Pump prices are considerably lower than the peaks observed in 2022 and 2023, corresponding with falls in wholesale fuel prices, indicating strong competition between retailers.”