THE £6.8 billion takeover of Asda by the Issa brothers could lead to higher fuel prices in some areas, the UK competition watchdog has warned.

Billionaire brothers Mohsin and Zuber Issa, who have family roots in Bradford, agreed a deal to take over supermarket giant Asda last October.

Now the Competition and Markets Authority (CMA) has said its investigations have raised “local competition concerns in relation to the supply of road fuel in 36 areas across the UK”.

The Issa brothers made their billions through the EG Group which operates filling stations, and currently operate 395 sites, while Asda owns 323 sites.

Two months after the Asda deal was agreeds, the CMA formally began its initial phase one proce into the deal to see whether it would lead to a “substantial lessening of competition”.

The CMA said that it has now found competition issues at the 36 locations as well as one other area, where it has specific concerns regarding the supply of a type of fuel called auto-LPG.

It said the Issa brothers now have five working days to offer a solution to address these competition concerns, and it will then have a further five days to consider whether it will accept these terms to or call for a more thorough investigation.

Joel Bamford, senior director of mergers at the CMA, said: “Our job is to protect consumers by making sure there continues to be strong competition between petrol stations, which leads to lower prices at the pump.

“These are two key players in the market, and it’s important that we thoroughly analyse the deal to make sure that people don’t end up paying over the odds.

“Right now, we’re concerned the merger could lead to higher prices for motorists in certain parts of the UK.

“However, if the companies can provide a clear-cut solution to address our concerns, we won’t carry out an in-depth phase two investigation.”

A spokesperson for the Issa brothers and TDR Capital said: “We will be working constructively with the CMA over the course of the next 10 days in order to arrive at a satisfactory outcome for all parties within phase one.

“This would provide welcome certainty for our colleagues, suppliers and customers, and allow us to move forward with our exciting plans for investment and growth at Asda.”

The Issa brothers are from Blackburn, but their parents Vali and Zubeda initially moved to Bradford from Gujarat in India in the 1970s to work in the textile industry.

On Sunday, they announced their latest takeover, buying fast food chain Leon in a deal believed to be worth £100 million.