The Competition and Markets Authority (CMA) has refuted Chancellor Rachel Reeves’ accusations of petrol station profiteering amid the Iran conflict. A recent CMA study reveals that retailer fuel margins remain broadly unchanged since the war began.
CMA Study Highlights Stable Margins
Average petrol and diesel prices rose by 26p per litre and 50p per litre respectively between February 20—a week before the conflict—and April 20. This increased the cost of filling a typical 55-litre family car tank by more than £14 for petrol and £28 for diesel.
However, the CMA reports that retail fuel margins across the market stayed steady at 10.3p per litre in February and 10.7p per litre in March, aligning closely with the 2025 average of 10.7p per litre. CMA chief executive Sarah Cardell states: ‘On average, retailer fuel margins did not increase.’
The study notes slight margin increases at some retailers but finds no evidence of profiteering, with further investigations underway. It recommends using the government’s Fuel Finder service, launched in February, to save up to £9 per fill-up by comparing prices.
Reeves Faces Backlash Over VAT Windfall
Higher pump prices have generated nearly £350 million in extra VAT revenue for the Treasury over the past two months, as the 20% levy captures a larger share of sales. Critics label Reeves the ‘real profiteer’ for refusing to reverse a planned 5p per litre fuel duty increase set for September, which will add about £3 to the average fill-up.
Extra driver spending at pumps since the war exceeds £2 billion. Brent crude oil recently hit over $126 (£94) per barrel—its highest since 2022—due to the Strait of Hormuz closure, keeping supplies tight and prices elevated.
Opposition Demands Fuel Tax Relief
Reform UK Treasury spokesman Robert Jenrick accuses Reeves of profiteering: ‘Rachel Reeves is the real profiteer at the pump as she loads on even more tax on fuel. Instead of desperately casting around for someone else to blame, she should scrap her disastrous fuel duty increase and make an emergency VAT cut on fuel as 40 other countries have.’
Tory shadow transport minister Greg Smith adds: ‘The only one price gouging out of this crisis is the Chancellor, who is taking in huge increases in VAT then cranking up fuel duty by 5p a litre from this September. Once again, this is a government trying to blame everyone else when it’s their own tax choices that are really hurting.’
Liberal Democrat Treasury spokeswoman Daisy Cooper calls for a 10p cut to the current 52.95p per litre duty: ‘The Treasury is raking in millions while businesses go to the wall and families struggle to put food on the table. It’s outrageous that whilst the country faces spiralling costs, the Government is just sitting on its hands. The Chancellor must act now and introduce Lib Dem plans for an immediate fuel duty cut, saving families £6.60 on every tank of fuel.’
Treasury Response
A Treasury spokesman attributes rising prices to the Iran war: ‘Motorists are paying more at the pumps because of the war in Iran. This is not our war and that is why we did not join it. We are determined to keep costs down for motorists.’
