Petrol Prices Fall From Their War Peak as the CMA Flags 11p Fuel Margins

The good news for drivers is that petrol has finally turned a corner. After climbing for three months on the back of the Iran conflict, pump prices began easing from their peak on 28 May, and diesel has been falling for weeks. The bad news is that you are still paying far more than the raw cost of fuel suggests you should. The competition watchdog has just confirmed that retailers are not profiteering from the war, yet it also warned that the margin built into every litre remains stuck at historically high levels of 11.3p.

In plain terms, the war pushed wholesale costs up and that is the main reason your fill-up hurts. But weak competition between forecourts means the slice retailers keep on top of those costs is fatter than it used to be, and that slice is not coming down even as oil prices fall. For a family filling a 55-litre tank, the difference between a sharp and a sleepy fuel market is real money every single week.

Why prices are finally easing

The conflict that began on 28 February sent oil and refined fuel prices sharply higher through March and April. Petrol reached its war high of 159.53p a litre on 28 May before edging down, while diesel peaked earlier, hitting 191.54p on 15 April and falling steadily since. As of the start of June, the average forecourt price stood at 159.37p for petrol and 183.75p for diesel.

The recent fall is being driven by the oil price itself. A barrel of crude has now traded below 100 US dollars for almost a week, which feeds through to lower wholesale costs for retailers within a fortnight or so. The RAC says that is a positive sign and potentially a test for forecourts, because falling wholesale prices should lead to lower pump prices if competition is working as it should.

What the competition watchdog actually found

The Competition and Markets Authority looked at whether retailers had exploited the war to widen their profits and concluded there was no evidence they had. Margins, it said, have been similar to those seen in 2025, meaning pricing strategy has not changed as a result of the conflict. The rise in prices is therefore down to higher wholesale costs rather than retailers cashing in on the crisis.

Sarah Cardell, chief executive of the CMA, said: “We know prices at the pump are putting real pressure on drivers’ pockets. While our analysis shows the rise in wholesale prices is the main reason for higher fuel prices, we remain concerned about weak competition in the sector leaving drivers paying more. Retailers should be in no doubt that we are continuing to monitor prices and margins closely and expect any reductions in wholesale prices to be rapidly and fully passed on to drivers.”

The margin that keeps your fill-up high

The figure drivers should pay attention to is 11.3p. That is the average fuel margin across supermarket and non-supermarket retailers, and the watchdog described it as historically high. A margin is the gap between what it costs a retailer to buy fuel and what they sell it for, covering their costs and profit. Before the competition concerns of recent years, that gap was typically much thinner, so the current level represents extra pence on every litre that drivers did not used to pay.

Simon Williams, head of policy at the RAC, said: “It’s positive to have confirmation retailers haven’t altered their pricing strategies as a result of the Iran war, but it’s worrying the watchdog has concluded competition is still lacking in the road fuel market and that margins are still at historically high levels.”

He added that the government’s new Fuel Finder service, introduced at the start of February, is meant to tackle exactly this problem, but that it is still early days. The next big test comes in August, when the CMA publishes its next report covering a period of lower wholesale prices. As Williams put it, the wholesale price of diesel has already come down considerably yet pump prices have only dropped by around 8p since their April peak. That lag is precisely what a competitive market is supposed to close.

Where petrol and diesel prices stand now

Since the war began on 28 February, petrol is up 26.5p a litre and diesel up 41.4p, a brutal rise that turned a routine fill-up into a budget headache for millions. Diesel drivers have been hit hardest, partly because diesel is more exposed to global supply shocks and partly because the wholesale spike came through faster. The recent easing offers some relief, but at 159.37p for petrol and 183.75p for diesel, prices remain close to a two-year high and well above where they sat at the start of the year. Drivers who remember petrol below 150p will be waiting some time for a return to those levels.

The pattern also explains why two cars on the same street can cost very different amounts to run. A diesel driver covering high mileage has felt the squeeze far more than a petrol commuter, and anyone weighing up their next car may want to factor that volatility in. Our coverage of how the conflict drove prices to a two-year high sets out how quickly the market moved.

How to pay less at the pump

You cannot control the oil price, but you can avoid overpaying. The single biggest saving comes from where you fill up. Supermarket forecourts are typically several pence a litre cheaper than motorway services and many branded sites, and the gap can run to 20p or more on the motorway network. On a 55-litre tank that is well over £10 a fill.

Use a price comparison tool before you drive to the pump. The government-backed Fuel Finder scheme is designed to show live prices nearby, and the watchdog says it can save drivers up to £9 a tank. The free myRAC app and similar services list the cheapest stations in your area so you are not guessing. Our guide to finding the cheapest fuel near you walks through the tools step by step.

Beyond shopping around, simple habits add up. Keep your tyres correctly inflated, since under-inflated tyres raise fuel use. Take the roof box and unnecessary weight out of the boot. Ease off hard acceleration and braking, and stick closer to 65mph on the motorway, where fuel economy falls away sharply above 70mph. None of these will undo a 26p rise on its own, but together they can claw back a meaningful chunk of what the war and the margins have added to your bill. The more drivers use price-comparison services, the CMA argues, the harder forecourts have to compete, which helps push prices down for everyone in the long run.

What drivers should watch next

The date to mark in the diary is August, when the CMA publishes its next assessment of the road fuel market. Importantly, that report will cover a stretch of lower wholesale prices, making it a clear test of whether forecourts pass savings on quickly or hold prices up to protect their margins. The RAC has already flagged that the wholesale price of diesel has fallen considerably while pump prices have dropped only around 8p since the April peak, so the watchdog will be watching that gap closely.

For drivers, the realistic outlook is a gradual easing rather than a sudden collapse. With crude trading below 100 US dollars a barrel, the direction of travel is downward, but the historically high margins mean the benefit will reach the pump slowly unless competition sharpens. The best defence remains the same: shop around, lean on price-comparison tools, and reward the cheaper forecourts with your custom. Every driver who switches to the lowest local price adds a little pressure on rivals to follow, which is exactly the competition the watchdog says the market is missing.

Sources:

• Business Motoring: Petrol prices fall as CMA finds no evidence retailers took advantage of war
• RAC Fuel Watch
• Competition and Markets Authority