Asda cuts another 4p off diesel and 2p off petrol after experts accuse fuel retailers of ‘rocket and feather’ pricing in January
- Drivers today will pay no more than 118.7ppl for unleaded and 120.7ppl for diesel
- It’s the second time Asda has triggered price cuts in a week
- RAC says reductions are overdue as wholesale prices fell throughout January
- Retailers did not lower pump prices quickly enough and instead pocketed profits
- Drivers paid £5 more than they should when filling their cars with fuel in January
Asda has been the first to react to overnight criticism of fuel retailers for not passing on savings to motorists.
The supermarket this morning announced that they have today lowered the price of fuel – the second price cut in in a week – knocking 4p per litre off diesel and 2p a litre off petrol.
It means drivers filling up at any of Asda’s 322 petrol stations will benefit from the price cut which has now seen the retailer bring fuel prices down by up to 7p across the last week.
The announcement came following an industry report that showed retailers had been pocketing profits from gradually falling wholesale prices during January.
Second fuel price cut in a week: The reduction in pump prices at Asda filling stations announced today means the price of a litre of fuel has dropped by as much as 7p in a week
Drivers filling up at any Asda fuel station will pay no more than 118.7ppl for unleaded and 120.7ppl for diesel, the supermarket has confirmed.
Morrisons and Sainsbury’s have already confirmed they will both match the cuts, though from Thursday and Friday respectively, while Tesco is also expected to follow suit with similar cuts, as the did when Asda triggered last week’s fuel price war.
Asda’s senior fuel buyer, Dave Tyrer said: ‘We’re pleased to be passing on these wholesale cost prices to customers for the second time in two weeks as the price of oil continues to fall.’
He added: ‘We will continue to put the savings straight back into drivers pockets without any vouchering requirements meaning all our customers, regardless of their budget, will benefit from a price cut at the pumps.’
The news will be welcomed by motorists, but has been long overdue, according to market analysts.
RAC Fuel Watch found that the wholesale cost of petrol and diesel (the price paid by retailers) had been falling throughout January.
However, during this time the average prices charged at the pumps of the UK’s four biggest supermarkets – including Asda – had actually increased every day until last week’s price cuts were announced.
Falling oil prices, mainly due to lower demand in China – the second biggest oil consumer behind the US – caused by the coronavirus outbreak last month.
This should have led to a price reduction at the pumps during January, the RAC says, but instead retailers put their prices up leading to the second consecutive monthly rise of both fuels.
As a result, motorists have been paying around an extra £5 to fill up their cars than they should have during January, RAC’s data shows.
Motorists have paid around £5 more than they should filling up their cars in January
Simon Williams, the fuel spokesman for the motoring organisation, said: ‘Based on steadily falling wholesale prices January should have been a good month for drivers at the pumps, but instead they ended up being paying well over the odds at the pumps. In fact, January was a perfect example of ‘rocket and feather’ pricing where prices go up far faster than they come down.
‘Retailers were very quick to protect themselves from a slight jump in the price of oil caused by the tensions between Iran and the US at the start of January by putting up forecourt prices, but when the cost of a barrel dropped back, for some reason, retail prices carried on going up.
‘Our biggest retailers – the supermarkets – blatantly resisted passing on the savings they were making to drivers until the RAC publicly called on them to do so on 27 January when RAC Fuel Watch data showed there was scope for a large cut. Two days later a headline-grabbing 3p a litre cut was announced.
He added: ‘This was clearly good news, but it’s hard to congratulate retailers on doing something they should have done at least a week before. Even since the cut pump prices are still out of kilter with what’s been happening on the wholesale market. As things stand now – despite the cuts – petrol is still 5p too expensive and diesel over 7p too dear.
‘We strongly urge retailers of all sizes to play fair with drivers and cut their forecourt prices. Going forwards we call on them to charge prices that more closely mirror drops in the cost they buy fuel in at in the same way they do when prices go up.
‘Sadly however, drivers are at the mercy of fuel retailers and this generally means they lose out on getting a fair deal.’
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