NEW FUEL PRICE WAR BOOST FOR MOTORISTS
A NEW fuel price war broke out yesterday as three of the country’s biggest supermarkets cut costs for drivers.
Asda unveiled reductions of up to 2p off a litre of petrol and diesel yesterday morning amid a fall in wholesale costs.
The announcement means motorists will pay no more than £1.20 for a litre of petrol and £1.24 for diesel at the retail giant’s 322 filling stations.
This is the chain’s lowest price for petrol since April.
Morrisons and Sainsbury’s responded by pledging to implement the same price cut over the
weekend. Asda senior fuel buyer Dave Tyrer said: ‘With Christmas just around the corner, we’re pleased to be able to lower the cost of fuel and pass these savings on to our customers.’
Earlier this week the RAC accused fuel retailers of refusing to pass on a fall in wholesale prices, claiming drivers were being overcharged by more than 5p per litre for petrol and 4p for diesel.
Government figures published on Tuesday showed the average cost of fuel in the UK was £1.26 for petrol and £1.30 for diesel.
AA fuel price spokesman Luke Bosdet said: ‘Asda’s price cut comes in response to other supermarkets offering money off fuel this weekend but tying those savings to spending in-store first.
‘This works well for families but excludes single, young and low-income shoppers who struggle to spend £60 in one go. Asda’s pump price cut is fairer for all.’
Research from the AA found that 35 per cent of people surveyed agreed with the statement ‘I feel manipulated by fuel savings that are tied to how much I spend in the supermarket’.
RAC fuel spokesman Simon Williams said: ‘The price of petrol is currently more than 5p a litre too high. Diesel is also more than 4p a litre too expensive.
‘Retailers are continuing to hold on to bigger margins despite there being plenty of room to cut prices due to a wholesale price that has fallen since early November. The retailers’ decision not to pass on savings [in unleaded petrol] means drivers are losing out on £2.75 on every tank they buy.
‘Diesel car drivers are missing out on about £2.50 every time they fill up.’
At the end of October, Asda was selling the cheapest supermarket unleaded at 121.64p a litre, 1.44p lower than its nearest rival Tesco (123.08p).
It also had the lowest priced diesel at 125.14p, 1.54p below Tesco (126.68p).
But Neil Greig, of motoring group
IAM RoadSmart, said that the drop undermines the existence of vital local petrol stations.
Mr Greig said: ‘This is good news for drivers in Scotland, however, this is a double-edged sword as it is only helpful if you live near one of the three major supermarkets involved.
‘This price drop will encourage drivers to go out of their way to buy petrol and this will then undermine the viability of local petrol stations who can’t compete.’
He added: ‘We are all in favour of cutting the cost of fuel at the pumps, as long as it is done evenly and throughout the country so it benefits everyone and not just those in central areas as an awful lot of local petrol stations have been lost in recent decades.’
It is the second price drop in recent months with the ‘big four’ supermarkets, including Tesco, announcing a price drop in September.
The forecourt cut was prompted by a fall in wholesale prices the previous month which was triggered by a 5 per cent drop in the price of oil. Campaign group FairFuelUK has estimated that drivers are overcharged by £23.5million a month because petrol retailers fail to pass on reductions in wholesale prices.
It said earlier this year that drivers are overcharged by at least 6p for every litre of fuel bought, and potentially more for diesel.
‘Plenty of room to cut prices’