Supermarkets Asda, Tesco and Morrisons cut the price of fuel but RAC says they could be doing more as wholesale costs drop
Morrisons has become the latest supermarket to cut the price of fuel in response to a reduction in wholesale prices.
The supermarket, which has 339 filling stations across the UK, says it is taking an average of 6p off the cost of a litre of unleaded and diesel at all of its forecourts.
Andrew Ball, fuel operations manager for the retailer, says the company is passing on recent reductions in wholesale costs to reduce the cost of motoring for customers when they most likely need it most.
He said: "It's the summer holidays and we know how tough the current cost of living is for our customers. So we hope this fuel price reduction will help motorists to save money at this challenging time."
Asda has also cut the price of unleaded at its pumps, most recently, by 5p and diesel by 3p, to help motorists save some money now that the wholesale costs are coming down.
Drivers, it says, will pay on average 174ppl for unleaded and 185ppl for diesel when filling up at any one of its 323 petrol stations across the UK.
The company's latest price reduction pledge follows a cut of 4ppl at the end of July, meaning the supermarket has reduced fuel prices by around 9ppl on unleaded and 7ppl on diesel in the last week.
AA fuel price spokesman Luke Bosdet has praised the move.
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."
Tesco has also made large cuts to the price of fuel, cutting the price of petrol by 6.5p and diesel by 4.5p, with the reductions now being seen at all of the retailer's 600 filling stations.
In a similar move to Asda, Sainsbury's too has brought about cuts in stages with an average of 5p being taken from a litre of fuel for drivers filling up at its forecourts.
The wholesale cost of petrol delivered to petrol stations, says the RAC, has fallen now for eight consecutive weeks by 20p from 151.93p at the start of June to 131.75p a litre in the last week of July.
The last time unleaded was this price on the wholesale market was in early May - which a week later led to a UK average pump price of just 167p a litre says the breakdown organisation.
Despite the drop in wholesale prices the reduction at supermarkets is between 9p and 10p - leading the RAC to insist it thinks the bigger retailers could continue to do more.
Spokesman Simon Williams explained: "What ought to have happened is that the biggest retailers cut their prices more significantly on a daily basis, given the wholesale price of petrol has fallen steadily over the last eight weeks. Instead, average retailer margin for petrol across the industry has been up around 20p a litre for the last two weeks – more than three times its long-term average.
"The average cost of delivered wholesale unleaded in the first week of May was 131.73p which gave rise to forecourt prices across the country hitting 167p a week later. Wholesale petrol averaged virtually the same last week which should – if retailer’s pass on the savings they’re benefitting from – in theory bring pump prices down to a similar level to what we saw in mid-May."
With prices now dropping across the board, Mr Williams says now is the time that drivers needing to fill their tank should shop around.
He added: "The best advice for filling up is no longer to assume the supermarkets are the cheapest, but to shop around as it’s highly likely you’ll find an independent retailer which is doing the right thing and fairly reflecting their lower wholesale costs by charging a lower price."