A motoring group is calling for a “price cut chain reaction across the country” as supermarkets respond to falling wholesale fuel costs.
Sainsbury’s, Tesco and Morrisons followed Asda in confirming cuts of up to 2p-a-litre for both unleaded and diesel from Friday, just over a week after the industry was accused of failing to pass on falling wholesale costs – particularly for diesel.
The latest average forecourt price data, measured by Experian Catalist, showed unleaded at 117.34p-a-litre, with diesel at 117.2p. Supermarket fuel costs are traditionally cheapest as they use fuel to drive shoppers to their stores.
Brent crude oil costs have tumbled back below $50 a barrel as the market continues to be gripped by over-supply. The price was below $47 on Thursday.
Efforts by many oil-producing nations to raise prices by slashing output in January – with some success – only encouraged producers of US shale to step up pumping.
The sole support for prices has come from disruption concerns over the diplomatic spat between Qatar and many of its Gulf neighbours.
The RAC had declared last week that UK motorists were getting a raw deal as forecourt averages lingered above the falling wholesale price trend.
The organisation’s fuel spokesman, Simon Williams, responded to the supermarket cuts by saying: “This is excellent news for motorists just as summer has finally arrived. It should now encourage every other retailer to follow suit and lead to a much-needed ‘price cut’ chain reaction across the country.
“While the value of the pound has fallen since the election, the price of oil has also reduced, bringing down wholesale fuel costs which should rightly be passed on to motorists at the pumps.”
His counterpart at the AA, Luke Bosdet, said: “Cheaper fuel at 4p a litre below than the national average has paid dividends for the supermarkets by maintaining their sales volumes while others’ have dropped.
“This may pull back the customers who have been going to non-supermarket forecourts for top-up shopping combined with a fuel stop.
“Non-supermarket petrol stations are going to have to react, as will the rural small town forecourts still charging an astonishing 120p a litre.”
Asda’s head of petrol trading, Dave Tyrer, said: “Today’s latest move shows that Asda is once again leading the way in reducing the price at the pumps to help the millions of motorists across the UK.
“Our new national price cap of 111.7p per litre on both unleaded and diesel will be welcomed by the millions of drivers who will be starting to plan their summer holidays.”