The UK’s major supermarkets have been accused of taking advantage of struggling motorists by keeping their fuel prices 10p per litre higher than necessary.
Petrol and diesel prices at the “big four” - Tesco, Asda, Sainsbury’s and Morrisons - have failed to follow recent sharp drops in wholesale costs, extending the retailers’ profit margins while motorists struggle with the worst cost-of-living-crisis for decades. Margins are now at 15p per litre, more than twice the historical average for supermarkets.
According to figures from the RAC, the wholesale price of petrol has fallen 13p per litre since mid-October while diesel has dropped by 22p. However, pump prices at the supermarkets have fallen just 3p and 4.4p respectively. The RAC said the latest gap between wholesale and forecourt prices was a “shocking” example of the rocket and feather approach to pricing that has seen fuel sellers raise prices rapidly as their costs increase but bring them down far more slowly when costs drop again.
The average price of a litre of petrol at one of the four supermarkets is now 160.96p, while diesel is 184.41p. That is around 2p per litre cheaper than the national average while supermarkets have traditionally been around 4p cheaper. According to the RAC, if the supermarkets were to be taking a lower average margin of 10p a litre on both fuels, they would be selling petrol for 152p and diesel for 173p.
The big four supermarkets are the country’s largest fuel retailers and have usually been the cheapest thanks to the huge volumes they sell. However, fuel price volatility in recent months has seen them reluctant to cut prices and meant independent filling stations are often cheaper.
RAC fuel spokesman Simon Williams said: “With many people struggling to put fuel in their cars it’s very sad to see the biggest fuel retailers taking advantage of their customers by charging far higher prices than they should be.
“The supermarkets dominate UK fuel retailing, primarily because they have traditionally sold petrol and diesel at lower prices due to the large volumes they sell, but sadly there is now a remarkable lack of competition among the four main players which means prices are far higher than they should be. If one of the supermarkets were to lead a round of price cuts, the others would follow suit which, in turn, would bring the average price of fuel down for the benefit of drivers everywhere.
“Asda has traditionally been the most aggressive supermarket on fuel prices, but while it’s still the cheapest of the big four, it seems far less keen to lower prices in a falling wholesale market than it has been in the past.
“We urge the supermarkets to do the right thing by their customers and cut prices by at least 5p a litre immediately. But, if events of this time last year are anything to go by drivers might be in for some pre-Christmas disappointment because despite similar margins in 2021 the supermarkets failed to cut their prices significantly. The big difference this year, of course, is that petrol is on average 16p a litre more expensive and diesel is an unbelievable 37p dearer (150.66p on 18 November 2021).”