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Asda trims fuel by 5p-a-litre after criticism for not cutting prices

Has Asda started a stealth fuel price war?  The supermarket has slashed petrol and diesel prices over the past two days and is now 2p a liter cheaper than its 'big four' rivals

Did Asda start a stealth fuel price war in time for Christmas? The supermarket is quietly slashing petrol and diesel by around 5p a liter after being criticized for not lowering prices at the pump

  • Fuel price analysis shows Asda has cut petrol by 4.5pa-litre in the last 2 days
  • Diesel prices at its 320 UK service stations have fallen by 5.5p over the same period
  • Despite significant price cuts, the supermarket did not make any announcement
  • Supermarkets have recently come under fire for ‘hanging on huge markups on fuel’
  • The competition watchdog also said this week that it had found evidence of a ‘rocket and feather’ fuel price this year.

Having recently been accused of ‘hanging on massive markups for dear life’ and failing to pass on cheaper fuel costs to motorists, a supermarket has shown the first sign of instigation of a price war from fuel as Christmas approaches.

Analysis of daily fuel price changes revealed that Asda had cut the price of petrol by 4.5 pa-litres at its 320 UK service stations in the past two days – and cut diesel by 5 .5 pence – without any announcements.

Before the pandemic, supermarkets typically made a fuss about cutting their fuel prices during the holiday season in an effort to boost spending in their stores.

The RAC, which spotted Asda’s recent price drop, said the move was likely an ‘admission that they should have acted sooner’ but said there were reasons for the prices to be reduced by an additional 10 pence per litre.

Has Asda started a stealth fuel price war?  The supermarket has slashed petrol and diesel prices over the past two days and is now 2p a liter cheaper than its 'big four' rivals

Has Asda started a stealth fuel price war? The supermarket has slashed petrol and diesel prices over the past two days and is now 2p a liter cheaper than its ‘big four’ rivals

Asda’s recent cuts now mean charging an average of 153.5p for petrol and 176.7p for diesel.

That’s around 4p a liter less than the UK average on Wednesday (157.8p for unleaded and 181.3p for diesel), but crucially it’s around 2p cheaper than competing supermarkets.

Still, the RAC said the decision to make a significant price cut without making an announcement was surprising.

The car group’s fuel spokesman, Simon Williams, said: “While we are delighted that a major supermarket retailer has finally started to respond to our calls to pass on the huge drop in wholesale prices of two fuels, the fact that these price cuts have been so significant quietly is surely to admit that they should have come much sooner.

When one of the ‘big four’ supermarkets makes cuts like this it traditionally triggers a ‘fuel price war’ and the others – Morrisons, Sainsbury’s and Tesco – follow suit.

The timing of a potential fuel price war between major supermarkets would be welcomed by the hundreds of thousands of commuters forced to drive to work for most of next week due to scheduled rail strikes taking place over four days.

With the RMT union also set to carry out a massive strike of around 40,000 railway workers over Christmas, the cheaper petrol and diesel prices will also be very welcome by those who don’t have a job. alternative to driving instead of taking the train to visit family and friends. during the holiday break.

“We urge the other three supermarkets to catch up quickly – or go even further – and offer drivers some much-needed relief from high prices the next time they fill up,” Mr Williams added. .

“If they do, it will bring the average UK petrol price down from its current 157.8p, benefiting drivers around the world.”

Still, he says rival supermarkets have the potential to cut prices further.

The RACs an analysis of recent wholesale prices shows that there is ‘easily room for another 10p-a-litre to come off the current average petrol and diesel price’.

The RAC said Asda's failure to announce the cuts was likely an 'admission they should have come sooner' after the car group slammed supermarkets for 'hanging on to margins massive for dear life' by not passing on cheaper wholesale costs to motorists.

The RAC said Asda’s failure to announce the cuts was likely an ‘admission they should have come sooner’ after the car group slammed supermarkets for ‘hanging on to margins massive for dear life’ by not passing on cheaper wholesale costs to motorists.

Earlier this week, the motoring organization said the failure of the big four supermarkets to cut prices at the pump resulted in retailers enjoying profit margins of more than 20p for every litre, which it called of “scandal”.

It also comes the same week the Competition and Markets Authority published an update to its investigation into the fuel retail sector, saying it had found evidence of ‘rocket and feather’ prices. in 2022.

The AA today said fuel prices are expected to be well below the current UK average, not least because wholesale petrol and – from this week – diesel prices are now back below what they were before the start of the war in Ukraine and caused oil prices to skyrocket.

While wholesale diesel is now cheaper than it was on February 24 – when Russia first invaded Ukraine – the average pump price for fuel is now 28p higher than it was not on that date.

The AA said it “accepts that there is still some lag between cost and price movements at the pump”, but says savings on diesel should soon be passed on to the pump to help businesses and transport costs, and thus reduce inflation.

“Of course, the November diesel cost crash was quick and pump prices will take time to catch up, but the gap between cost and retail price is huge.” Fuel contracts will also take time to update, but the most immediate victims are small businesses, artisans and rural businesses who are being denied a significant reduction in their operating costs,” explained Luke Bosdet. , the AA’s fuel price expert.

“A 28p drop in the average diesel pump price cuts the cost of filling an 80 liter Transit van tank by £22.40. This can reduce delivery costs by almost 3%.

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