On Friday, supermarket chain Asda sparked a new fuel price war by reducing its prices up to 2p per litre. The decision meant that motorists were able to fill up at any of the store’s 195 forecourts across the nation for no more than 136.7p per litre for petrol and 141.7p per litre for diesel. This came before May Bank holiday weekend, prompting rivals Tesco, Morrisons and Sainbury to match them.
Andy Peake, the petrol trading director for Asda, said that motorists have had a tough year so far, but their latest move shows that they are once again leading the way in dropping prices at the pump. With the new reduction, the supermarket has cut its fuel prices by 4p per litre over the past three weeks. After the announcement, Tesco, Morrisons and Sainsbury’s all said they would follow suit with up to 2p per litre price cuts at their pumps. There were hopes the move would force competing oil firms with filling stations nearby to follow suit as well.
The fuel price war comes as a poll by RAC shows that 29% of drivers have admitted to reducing the number of long-distance trips they make over the last year due to soaring pump prices. Costs have risen up to 48% since 2009, and the average price of petrol is still over 141p per litre. This has meant that the average motorist spends about £78 to fill a tank with a 55-litre capacity. The average price of diesel is over 147p per litre, which has left drivers paying £80 to fill up a 55-litre tank – 43% more than in 2009.
RAC technical director David Bizley says drivers are struggling to deal with the impact of high living costs. Their research shows that several motorists have or will give up family commitments because of rising fuel expenses. As the May Bank holiday nears, which is a great time for families and friends to spend together, it looks as though many feel they may be unable to afford a journey to get together with loved ones, he added.
The AA says it’s thrilled that the supermarkets are reducing pump prices after months of steady increases. The motoring group said two months ago that the cost of filling a big family car jumped to £98 for petrol, as forecourt prices rose to record highs. Head of public affairs Paul Watters said at the weekend that it’s about time some serious movement was made in the industry. As always, supermarkets are leading the way, and they hope forecourts across the country will reduce their prices as well – even beyond just 2p per liter.
Although the AA says the price drops will mean a £1.50 reduction in the cost of filling an average family vehicle, Watters gives a warning to drivers not to get too happy just yet. This is due to the price of unleaded only returning to February levels.
However, the AA has also criticised petrol giants for ripping motorists off at the pump for an extra 7p per litre. In Germany and Denmark, crude has become cheaper so pump prices have fallen 6%. At the same time, Spanish drivers are paying 5% less compared to a few weeks ago. However, UK forecourt prices have only declined 1.7%.
Luke Bosdet, a spokesman for the AA, said that the story is the same – prices are falling nowhere near as fast as they rose. The average fall for eight countries in Europe since mid-April was 3.9%, which is twice as much as in the UK. The price of Brent crude has dropped to $114 per barrel, which is the lowest it’s been in three months, following bleak jobs figures from the US. The AA is concerned big supermarkets won’t continue lowering their prices and stay at just 2p per litre to match Asda, he added.
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