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Supermarkets have given up fuel price competition claims RAC

John Wood ·
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Three of the big four supermarket groups appear to have stopped trying to compete with Asda on fuel prices, according to the RAC.

Its Fuel Watch reports that since mid October the other supermarket fuel retailers have chosen not to compete as closely on the price of unleaded petrol, and they are charging up to 4ppl more than Asda.

At the end of December a litre of unleaded petrol cost an average of 117.23p at the four biggest supermarkets, and diesel was 126.76p. The average price at an Asda forecourt, however, was 114.7ppl for petrol and 125.53ppl for diesel.

RAC fuel spokesperson Simon Williams said: “Normally, the other three supermarkets are 1ppl to 1.5ppl more expensive on unleaded, but our data shows that since October they have abandoned this strategy in favour of pricing 2.5p to 4p higher for a litre of petrol. The decision by all supermarkets to take more profit on a litre has led to every driver having to pay more to fill up than they should have to. This is because the UK average is negatively affected as other retailers are not being forced through competition to lower their prices.

“This is a highly unusual situation, the likes of which we haven’t seen before. Drivers could be paying around 3ppl more for their fuel simply because of a retail pricing decision at three supermarkets which together sell a high volume of fuel. This is important as supermarkets only operate 18% of the UK’s 8,422 forecourts but sell around 45% of all the fuel.

“Of course, it should also be the case that smaller retailers ought to be moving their prices down on their own without having to be forced to do so by nearby supermarkets. We commend those smaller retailers that proactively do this.

“Unfortunately, unless you live near the cheapest supermarket fuel retailer or an independent retailer that is very price-competitive, the amount you pay for your petrol and diesel is likely to be far higher than it should be.”

Over the month of December the average price of unleaded went down 2.75ppl from 123.67ppl to 120.92ppl and diesel reduced by 3.08ppl from 133.09ppl to 130.01ppl.

However, the price of oil fell 14.5% from $60.31 at the start of the month to $51.52 on 27 December, and the RAC suggested the price of unleaded should come down in the next fortnight by more than 8ppl to 113ppl and diesel by 10ppl to 120ppl if retailers passed on savings in the lower wholesale price. This would see the supermarkets charging around 110ppl for petrol and 117ppl for diesel.

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Keywords:

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    wholesale
  • Daily
    Average
Weekly retail fuel prices: 10 June 2019
RegionDieselLPGSuper ULUL
East135.3166.90140.93130.00
East Midlands134.59140.57129.69
London134.50141.91130.33
North East133.19142.40129.15
North West134.1363.90139.73129.13
Northern Ireland131.34135.32128.05
Scotland134.25140.07129.86
South East135.2562.40141.74130.52
South West134.5167.90140.57129.57
Wales133.6764.90137.30128.83
West Midlands134.34140.64129.70
Yorkshire & Humber133.72140.40129.24

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