Asda has announced it has cut fuel prices amid accusations that the “big four” supermarkets have kept the cost artificially high in recent weeks.
Morrisons, Sainsbury’s, Tesco and Asda – along with several other suppliers – have faced criticism for failing to reduce their prices in line with falling wholesale prices since the record highs of early July.
But Asda said on Friday that it has cut the cost of unleaded by 5p per litre and diesel by 3p per litre.
Drivers will now pay on average 174p per litre for unleaded and 185p per litre for diesel when filling up at Asda’s 323 petrol stations across the UK.
This is good news for drivers as it will cause other retailers to reduce their prices, but it comes too late as the wholesale price of petrol has fallen significantly over the last seven weeks
Simon Williams, RAC
Asda had already cut prices by 4p per litre earlier this week, meaning the supermarket has now reduced fuel prices by 9p per litre on unleaded and 7p per litre on diesel since Monday.
Sainsbury’s has now told the PA news agency that it also plans to reduce prices, although they will vary because the supermarket prices fuel locally.
Morrisons also said it has been lowering prices this week and will be making more cuts on Saturday morning, although the supermarket will not be announcing a blanket cut.
“We are continuing to lower our prices as we endeavour to be amongst the cheapest in the areas we operate,” a spokesperson said.
It comes after the RAC said the big four supermarkets’ prices have recently mirrored the UK average when they are usually around 4p cheaper.
The vehicle recovery firm said the cost of unleaded at the retailers should have come down by 16p since July’s record highs to the 174p-per-litre mark, according to its calculations.
Yet on average, supermarkets had only reduced the price of a litre by 5.5p.
In terms of diesel, RAC said prices had been reduced only by 4p per litre since the all-time highs in July but supermarkets needed to reduce them by another 6p per litre in order to bring the average price down to 189p per litre.
RAC fuel spokesman Simon Williams said Asda cutting its prices to an average of 174p per litre for unleaded and 185p per litre for diesel should now cause other retailers to reduce their prices.
However, he criticised the move for being “too late” because motorists have been losing out for weeks.
Asda’s price move is impressive, in effect cutting 10p a litre off the UK average price of petrol
Luke Bosdet, AA
He said: “This is good news for drivers as it will cause other retailers to reduce their prices, but it comes too late as the wholesale price of petrol has fallen significantly over the last seven weeks.
“This means hard-pressed motorists have been losing out while retailers enjoyed 20p-a-litre margins – much higher than normal.”
AA fuel price spokesman Luke Bosdet welcomed the “impressive” move by Asda.
He said: “Asda’s price move is impressive, in effect cutting 10p a litre off the UK average price of petrol.
“That’s potentially a fiver off a tank for those filling up this weekend, compared to the artificially high prices on too many major retailer forecourts and in too many towns.”
PA has contacted Tesco for comment.