Drivers are still paying too much for fuel, the UK’s competition watchdog has warned, with high prices costing motorists £1.6bn last year alone.

The Competition and Markets Authority (CMA) said that weakened competition in the fuel sector is impacting drivers’ wallets.

It found that supermarkets’ profit margins – which is the difference between the price they buy fuel at and what they charge motorists – had doubled since 2019.

“When it comes to road fuel, the simple answer is that drivers are still paying too much,” CMA chief executive, Sarah Cardell told the BBC’s Today programme.

The watchdog said the margins that supermarkets are charging drivers are double what they were in 2019.

The CMA began investigating the road fuel market last year and, at the time, made a series of recommendations to help drivers cut the cost of filling their tanks.

These included setting up fuel finder scheme that could help motorists find the cheapest fuel in their area using map apps and sat-navs.

But Ms Cardell said: “One year on and drivers are still paying too much.”

Motoring group RAC said drivers paying £1.6bn more than they should have “is nothing short of outrageous.”

“Drivers have every right to feel ripped off, especially knowing there is virtually no market competition between retailers,” said RAC head of policy Simon Williams.

Ms Cardell said it would work with the new government to help them to bring a “real-time fuel finder scheme” into effect, showing drivers where the cheapest prices were available.

The CMA claims this scheme could save drivers up to £4.50 each time they refuel.

A number of major retailers now contribute to the voluntary price data sharing scheme but the CMA has called for a compulsory system.

In 2019, supermarkets were making a margin of 4.4% on fuel and now that’s doubled to 8%.

Non-supermarkets were making a margin of 6.8% in 2019 and now make 8.5%.