For years, UK motorists relied on supermarkets like Tesco, Asda, and Sainsbury’s for the cheapest fuel on the market. But recent trends suggest that the landscape has shifted — and not necessarily in the customer’s favour. Here’s what’s changed, and why it matters.
📉 The End of the Supermarket Fuel Price Advantage?
Supermarkets traditionally used low fuel prices to drive footfall to their stores, undercutting independent and branded retailers. In 2016, their profit margin on fuel was around 2.3p per litre — tight, but competitive.
Fast forward to 2019, and margins had more than doubled to around 5.7p per litre. Then came the global fuel market disruptions triggered by the war in Ukraine, and margins surged even further — hitting 10p per litre in 2022 and peaking at 23p per litre for diesel in May 2023.
This means supermarkets have increasingly kept more of the wholesale price reductions to themselves rather than passing savings onto drivers — a clear break from past pricing behaviour.
🏪 Asda: From Market Leader to Price Laggard?
Asda, long considered a price leader in UK fuel retailing, has notably changed its pricing strategy. Under new ownership, Asda’s fuel prices have in some cases been higher than those of Tesco and Sainsbury’s, a significant shift that has been widely reported and scrutinised.
This evolution has narrowed the once-wide price gap between supermarkets and traditional forecourt operators, blurring the lines between where drivers can expect to find the best deal.
🏛️ Government Steps In: Transparency and Accountability
These changes haven’t gone unnoticed. The Competition and Markets Authority (CMA) found that higher supermarket fuel margins cost UK drivers £1.6 billion more in 2023 than they would have under earlier pricing norms.
In response, the government is implementing new rules to increase pricing transparency, including:
- Requiring retailers to publish live fuel prices.
- Supporting a PumpWatch-style scheme to help consumers easily compare local prices.
The goal: to restore competitive pressure and help consumers make informed choices at the pump.
🧾 What This Means for UK Drivers
Supermarkets are no longer a guaranteed source of the cheapest fuel. Drivers are encouraged to:
- Use apps or online tools to compare prices locally.
- Be aware that independent forecourts or branded retailers might now offer better value.
- Stay updated on policy changes that could improve fuel price fairness.
✅ Final Thoughts
The UK fuel market is evolving. Supermarkets, once the go-to for affordable fuel, are now under scrutiny for increasing margins and reducing transparency. For fuel card users, fleet managers, and everyday drivers, staying informed about these shifts is essential — not just to save money, but to understand the broader market forces at play.