Supermarket giants accused of profiteering at the pumps

Forecourt operator claims Tesco, Morrisons, Asda and Sainsbury’s are failing to pass on savings to drivers

THE head of Britain’s fastest-growing petrol forecourt operator has accused supermarkets of profiteering at the pumps as prices leap to fresh highs.

Darren Briggs, chief executive of Ascona Group, claimed companies such as Tesco, Sainsbury’s, Morrisons and Asda are failing to pass on savings to drivers despite buying in fuel more cheaply than independent rivals. But Asda hit back, saying it is the “price leader” and was the first forecourt operator to pass on cuts to fuel duty.

Mr Briggs welcomed a competition inquiry into forecourt pricing, yet criticised Boris Johnson for making petrol station operators a “scapegoat” of the ongoing energy crisis. He said that the amount of verbal abuse directed towards his staff had risen since the Prime Minister pledged to crack down on “rip-off ” prices at the pumps.

The wholesale price supermarkets pay is typically based on a lag of up to three weeks, allowing them to bolster profit margins at a time when oil prices are rising sharply. This compares with independent operators, most of which pay for fuel based on the previous week’s average price. Around a quarter are forced to pay the spot price on the day the fuel is delivered.

In a rising market, this means independent operators must increase their prices more quickly – giving supermarkets the chance to make bigger profits if they follow suit, Mr Briggs said.

His criticism of supermarkets came as the Competition and Markets Authority confirmed it would conduct a “short and focused review” of the fuel market in response to Kwasi Kwarteng, the Business Secretary, asking the body to investigate if duty cuts were being passed on to customers. Prices at the pumps have hit fresh highs, prompting calls for the Government to reduce duty further to help households already grappling with the cost of living crisis.

Simon Williams, RAC fuel spokesman, said: “The speed and scale of the increase is staggering with unleaded going up 7p in a week and diesel by nearly 6p. This must surely put more pressure on the Government to take action to ensure drivers don’t endure a summer of discontent at the pumps.”

The big four supermarkets – Tesco, Sainsbury’s, Morrisons and Asda – enjoy a dominant position in the UK fuel market. They sell more than 43pc of the fuel by volume but have less than one in five of the total number of sites.

Mr Briggs, whose company Ascona operates across 59 locations, making it the UK’S seventh largest forecourt operator, asked why, in his view, supermarkets were not passing on savings to their customers.

“If they’re benefiting from a three week lag, and they’re matching independent retailers on price – you do the maths,” he said.

The discrepancy between supermarkets and independent retailers was to the “detriment of the industry”.

He added: “It would be a lot easier for everyone if supply agreements were based on a previous week’s average.”

A spokesman for Asda said: “Asda is the price leader in the supermarket fuel sector and despite significant increases in wholesale fuel costs our average petrol price today is 8p per litre cheaper than independent operators.”

Tesco, Sainsbury’s and Morrisons were contacted for comment.