Most drivers assume the retailer takes very little from each litre of petrol sold — that the pump price is mostly tax and wholesale costs. The reality in 2026 is very different. The retailer spread — the difference between the pump price and the sum of duty, VAT and wholesale costs — reached a record 33.97p per litre in April 2026, before falling back to around 14p per litre in July. Here is exactly where every penny of your 149.80p goes.
Where does your 149.80p per litre go?
At the current national average petrol price of 149.80p per litre, here is the approximate breakdown:
| Component | Pence per litre | % of pump price |
|---|---|---|
| Fuel duty | 52.95p | 35.3% |
| VAT (20% on total) | 24.97p | 16.7% |
| Wholesale cost (crude oil, refining, distribution) | ~58p | ~38.7% |
| Retailer margin (gross) | ~14p | ~9.3% |
The retailer margin is not pure profit — it covers the cost of running the forecourt including staff, electricity, maintenance, insurance, business rates and delivery. The net profit margin for most forecourt operators is typically 1-5p per litre after operating costs.
What is the retail spread and why does it matter?
The retail spread — or retailer margin — is calculated by the Government as the difference between the pump price and the sum of duty, VAT and the wholesale cost of fuel. According to Government statistical data, the retail transport fuel spread stood at 6.70p per litre in late June 2025. It then widened to over 9p per litre by late 2025, and expanded sharply during the Middle East conflict in spring 2026, reaching a record high of 33.97p per litre in mid-April 2026. (source)
The record April spread was partly driven by the lag between wholesale prices spiking (due to the Strait of Hormuz closure) and pump prices catching up. However, the CMA has noted that retailer margins remained "above historic levels" even after accounting for cost increases. By mid-July 2026, the spread had narrowed back to approximately 14p per litre as the peace deal brought wholesale costs down.
How margins have changed since 2017
The CMA has access to confidential cost data from major fuel retailers — data not available to the public — that allows it to calculate actual margins rather than estimated spreads. Its findings are striking: (source)
- Supermarket fuel margins averaged 4% in 2017
- By H1 2025, supermarket margins had risen to 8.4% — more than double
- Non-supermarket margins rose from 6.4% in 2017 to 9.8% in H1 2025
- In December 2025 and January 2026, supermarket margins reached 12.7p per litre, compared to 10.0p in November 2025
The RAC's senior policy officer Rod Dennis has stated: "The sheer time it is taking for any meaningful price reductions to reach forecourts is a continuing cause of concern. Retailers are persistently taking far higher margins than they have done historically." (source)
Why have margins risen so much?
The CMA identified several factors in its 2023 market study and subsequent monitoring reports:
Weakened competition
The number of UK petrol stations fell by around two thirds between 1970 and 2020 as supermarkets consolidated the market. With fewer competitors in many local areas, the competitive pressure that kept margins low has weakened. The CMA found that in 2022, Asda and Morrisons each separately decided to target higher margins — and other retailers followed rather than competed.
The Fuel Finder scheme's early days
The Government's Fuel Finder scheme, which launched in February 2026, is designed to restore competitive pressure by making price comparison easy. The CMA expects that better price transparency will gradually squeeze margins as drivers shop around more effectively. The scheme is too new to have significantly affected the margin data yet.
Higher operating costs
Energy costs for running forecourts — pumps, lighting, payment systems — rose sharply during the energy crisis of 2022-23 and have remained elevated. The CMA has committed to reviewing whether operating cost increases explain part of the margin rise in its first annual monitoring report later in 2026.
What this means for you
The practical implication is that the gap between the cheapest and most expensive stations near you represents almost entirely retailer margin rather than genuine cost differences. A station 2 miles away charging 10p more per litre than your local supermarket is not paying more for its fuel — it is simply charging a higher margin because it can.
At 14p per litre current margin on 800 litres per year, the average driver is contributing approximately £112 per year in retailer margin. At the April peak of 33.97p per litre, that figure was briefly £272 per year. Consistently choosing the cheapest nearby station captures the competitive part of this margin for yourself rather than leaving it with the retailer.
Use our live fuel price map to find the cheapest station near you, updated every hour from the Government's mandatory Fuel Finder data. Our fuel cost calculator shows exactly how much you spend annually and how much you could save by consistently using cheaper stations.
Sources
- Government weekly road fuel price statistics — DESNZ
- CMA Road Fuel Monitoring Report, 2025
- RAC Fuel Watch
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- Are supermarkets still the cheapest for petrol in 2026?
- Why petrol prices rise fast but fall slowly
- Hundreds of stations breaking fuel price reporting rules
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- Calculate your annual fuel cost
- Find the cheapest petrol near you — live map
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