Asda starts fuel price war... after record rise
A PETROL price war was launched yesterday after a month which saw the biggest fuel price rises since 2011.
Asda led the charge with a new price cap of £1.25 per litre for unleaded and £1.28 for diesel at its 318 forecourts – price cuts of up to 3p and 2p per litre respectively.
Sainsbury’s quickly cut pump prices at its 311 filling stations by the same amounts, followed by Morrisons at its 333 outlets. Tesco later announced a 2p cut on both fuels.
The news came as figures from the Office for National Statistics revealed that the cost of petrol had leapt by 4.6p per litre between April and May this year.
This put £2.53 on the cost of filling up a typical family car’s 55-litre fuel tank and took the average price to 125.4p, the highest since October 2014.
In percentage terms, fuel prices registered their biggest monthly hike in seven years, rising 3.8 per cent. The ONS said this rise, driven by higher wholesale oil prices, was the single biggest factor preventing a fall in the cost of living in Britain.
Mike Hardie, head of inflation at the ONS, said: ‘Recent large rises in the cost of crude oil have fed through to prices paid by consumers at the pump. Air fares and ferry prices also contributed to the overall increase in inflation due to the timing of Easter.’
Fuel retailers have been accused of exploiting drivers by failing to pass on a drop of more than 2p in wholesale costs as the price of oil has started to fall.
Luke Bosdet from the AA praised Asda for taking the lead but described the overall delay as ‘shameful’.
RAC spokesman Rod Dennis said: ‘At last, retailers have done the right thing. From our data, we could see no justification for them holding on to savings that they have been benefiting from for three weeks.’
He added: ‘Millions of households and businesses will have been feeling the effect of having to spend more on what is an essential purchase for many. Today’s cuts should bring some welcome relief.’
The RAC says falls in the price of oil have been caused by more drilling in the US, increased output from Russia and speculation that the oil-producing group, Opec, will ease its restrictions on production.
The ONS also revealed yesterday that the Consumer Price Index rate of inflation had stayed still at 2.4 per cent.
Along with fuel prices, a rise in air and ferry fares had propped up the rate. A spokesman said this was due to a statistical quirk around the timing of Easter.
The main drags on inflation were energy bills rising less than last year, a fall in the price of computer games and stable or falling food prices, particularly sugar, jam, syrups, chocolate and confectionary.
Roger Burnley, chief executive of Asda, said: ‘We know that the cost of living is at the centre of the mind for our customers and will always do whatever we can to reduce that burden.’
‘Bring some welcome relief’