Supermarkets ‘not passing on fuel savings to customers at pumps’

THE “big four” supermarkets have been accused of refusing to pass on fuel savings to drivers – despite petrol prices at the lowest levels since mid-may.

Department for Business, Energy and Industrial Strategy data showed that a litre of petrol now costs an average of 165.5p, while diesel was 181.1p per litre.

This, the lowest pump price since mid-may, coincides with a fall in wholesale costs due to a drop in oil prices.

The RAC has accused Tesco, Sainsbury’s, Asda and Morrisons of failing to pass on savings to consumers following the fall in prices. Simon Williams, RAC fuel spokesman, said: “Prices should have fallen much further than they have due to the big reduction in the cost of wholesale fuel this summer.

“And the main reason this hasn’t happened is that the big four supermarkets, which dominate UK fuel sales, have refused to pass on savings they are benefitting from by buying cheaper wholesale petrol and diesel.”

Retail fuel margins are now 19p a litre, Mr Williams said, 12p more than the long-term average.

“Petrol should really be on sale for 153p a litre and diesel 175p,” he said. Mr Williams said independent retailers, which have traditionally been far more expensive than supermarket rivals, are now often selling at lower prices.

Larger retailers tend to buy their petrol further in advance, meaning changes to wholesale prices are slightly slower to filter through to consumers, according to an industry source.

Andrew Opie of the British Retail Consortium said: “Retailers understand the cost pressures facing motorists and will do everything they can to offer the best value for money across their forecourts, passing on cost reductions as they feed through the supply chain.”

Asda said: “Asda has consistently offered motorists the best value at the pumps. Since the start of July our prices have fallen 25p per litre on petrol and 18p a litre on diesel. In addition, today’s prices are 2p per litre below the UK average on petrol and 3ppl on diesel.”

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

Earlier this year, the then prime minister Boris Johnson pledged to name and shame petrol stations that failed to pass on the Government’s fuel duty cut.

Mr Johnson was annoyed that the 5p a litre fuel duty cut announced in March was failing to pass through to the pump, prompting a competition regulator investigation. In July, the Competition and Markets Authority launched a study into the relationship between wholesale and retail prices, due to be published in the autumn. A previous review found that growing oil refining margins were one of the main causes of fuel price rises earlier this year.

The highest average fuel prices for the year so far were recorded on July 4, when petrol was 191.6p per litre and diesel nearly 200p.

Since then, the cost of filling a typical 55-litre family petrol car has been cut by more than £14, while refuelling diesels costs nearly £10 less.