Drivers could soon be told where they can buy the cheapest petrol near them under new plans being put forward to clamp down on profiteering.

Motorists buying fuel at supermarkets in 2022 paid around 6p more per litre than they should have done, claims the Competition and Markets Authority, which says changes to wholesale prices are also not always passed quickly onto customers.

At present, retailers only provide the most up-to-date information about the price of petrol and diesel at the forecourt itself when a vehicle pulls in.

The CMA, in a report released on Monday, says this is making it hard for drivers to compare prices and ‘weakens competition’.

Instead it wants to see a ‘fuel monitor’ body introduced with rules that would force those selling petrol and diesel to provide up-to-date pricing information drivers could then find either through sat navs or map apps or through a dedicated fuel app that would steer motorists to the cheapest prices near to them.

With greater transparency and shopping around as effectively as possible, the driver of a typical family car could save up to £4.50 a tank within a 5-minute drive, suggests the CMA.

Sarah Cardell, Chief Executive of the CMA, explained: “Competition at the pump is not working as well as it should be and something needs to change swiftly to address this. Drivers buying fuel at supermarkets in 2022 have paid around 6 pence per litre more than they would have done otherwise, due to the four major supermarkets increasing their margins. This will have had a greater impact on vulnerable people, particularly those in areas with less choice of fuel stations.

“We need to reignite competition among fuel retailers and that means two things. It needs to be easier for drivers to compare up to date prices so retailers have to compete harder for their business.

“This is why we are recommending the UK government legislate for a new fuel finder scheme which would make it compulsory for retailers to make their prices available in real time. This would end the need to drive round and look at the prices displayed on the forecourt and would ideally enable live price data on satnavs and map apps.”

By 2030 sales of new petrol and diesel cars are expected to be banned in the UK.

As the country moves towards net-zero, adds the report, the demand for petrol and diesel will reduce and having a fuel monitor would help officials track the impact of this on vulnerable customers likely to remain dependent on petrol and diesel for longer as well as those living in more remote areas who have a limited choice of fuel stations and so risk being subjected to higher prices.

Sarah Cardell added: “Given the importance of this market to millions of people across the UK this needs to be backed by a new fuel monitor function that will hold the industry to account.

“As we transition to net zero, the case for ongoing monitoring of this critical market will grow even stronger, so we stand ready to work with the UK government to implement these proposals as quickly as possible.”