How can drivers save money at the fuel pump?

Petrol and diesel prices might have come down slightly over the last year, but many drivers are still paying more than they should to fill up their car.

The Competition and Markets Authority (CMA) believes this is, in part, due to retailers keeping their profit margins “persistently high”.

So the government is taking action and launching a new tool to make it easier for drivers to get the best prices.

Why are fuel prices still so high?

A retailer’s fuel margin is the gap between what it pays for petrol or diesel and the price it sells it for at the pump.

While wholesale fuel prices have fallen, the CMA says these margins are still well above historic levels.

The watchdog points out that in a competitive market, falling prices or rising operating costs would usually squeeze retailers’ profits. 

But its analysis shows that isn’t happening - and consumers are paying the price.

“This indicates competition in the sector is weak,” said Dan Turnbull of the CMA.

“If it was working well, drivers could see lower prices at the pump.”

A new tool to help drivers save

Next year, the government is to launch its “fuel finder” scheme, so it’s easier for drivers to compare petrol and diesel prices in real time.

The hope is that it will give retailers more of an incentive to compete on prices at the pumps and charge drivers less.

“We know fuel costs are a big issue for drivers, especially at this time of year, with millions making journeys across the country,” Mr Turnbull said. 

“This is why the fuel finder scheme is crucial - it will put power back in the hands of motorists and save households money.”

What else can I do to cut fuel costs?

With a little thought and planning, you can lower the cost of getting behind the wheel.

Shop around

Do your research and check which petrol station in your area offers the best deals at the pumps.

Avoid motorway services 

Motorists are hit with premium prices at service stations, so if you’re planning a long drive, fill up before you get on the motorway.

Fuel loyalty cards

Some petrol stations and supermarkets have loyalty schemes, so if there’s one or two you use regularly, consider signing up. 

Shell Go+, BPme Rewards and Texaco Rewards allow you to collect points that can be exchanged for money on fuel. 

Supermarket loyalty schemes like Tesco’s Clubcard can also be used for fuel purchases.

Drive efficiently and look after your car

How you drive and the condition of your vehicle affects how much fuel you use - and ultimately, how much you’re spending.

Use cashback 

Paying for fuel with cashback credit or debit card could also help offset higher prices.

But remember you have to repay the full balance each month to avoid paying interest, as this could cost you more than the saving in the long term.

Read our blog on 10 easy ways to cut the cost of driving for more money-saving tips.