RAC issues supermarket fuel warning for Asda, Tesco, Morrisons and Sainsburys as cheapest loses crown

The RAC has revealed that a supermarket has lost its crown as the cheapest for fuel as it complained of a ‘miserable deal’ for drivers. The motoring organisation said that although May saw prices come down slightly they were still unfair and not reflecting bigger reductions in the wholesale cost of fuel.

According to RAC Fuel Watch the average cost of a litre of unleaded finally dropped by 2.4p last month, from 150.31p to 147.88p, saving drivers around £1.30 a tank, with the reduction at supermarkets smaller at just 1.2p (147.31p to 146.15p). Average diesel prices dipped further by 4.5p, from 158.06p to 153.58p, although again supermarkets cut by less at 3.4p a litre, from 154.93p to 151.49p.

The RAC’s analysis of data provided to the Competition and Markets Authority (CMA) also found that Asda, the supermarket that for a long time prided itself on selling the cheapest fuel, is no longer the most affordable retailer. Instead, the other three supermarkets that make up the ‘big four’ – Tesco, Morrisons and Sainsburys – are selling petrol for an average of 2.1p less per litre (145.25p per litre, compared to Asda at 147.38p) and diesel for 2.5p less (150.45p per litre, compared to Asda at 152.98p).

RAC senior policy officer Rod Dennis said: “A month of decreasing fuel prices should be seen as a good one for drivers, but the sheer time it is taking for any meaningful price reductions to reach forecourts is if anything a continuing cause of concern. When it comes to much-needed pump price cuts, it’s sadly a case of too little, too leisurely, with most drivers still getting a miserable deal every time they fill up.

“We’re once again in classic ‘rocket and feather’ territory, with pump prices only trickling down when they should really be falling like a stone. What’s more, not only have wholesale prices been coming down consistently for over a month, but the average margins taken by retailers are still so much bigger than in the past. This means pump prices are at levels much higher than we ought to be seeing, which is all the more concerning given drivers are meant to still be benefiting from a 5p a litre duty cut introduced more than two years ago.

“It’s also interesting to see that Asda no longer holds the crown for selling the cheapest fuel, despite the pledge made when it was subject to a merger a year ago.** The other three major supermarkets, as well as some enterprising independents, now offer lower prices. But with only a few exceptions, there doesn’t appear to be much in the way of price competition taking place.

“The CMA now has the powers it needs to take a closer look at what’s going on across the country when it comes to fuel retailing. In the short term, this should mean greater visibility of pump prices for drivers – and the far fairer prices that those in Northern Ireland continue to enjoy. But crucially, it should also mean it can identify occasions where wholesale price drops aren’t being properly reflected at the pumps, something our analysis shows is sadly still happening.”

Data from the RAC suggested retailers are persistently taking far higher margins than they have done historically with those on petrol currently at the 13p mark and diesel even higher at 16p, despite the long-term margin on both fuels being around 8p per litre.