Page last updated at 16:45 GMT, Tuesday, 22 July 2008 17:45 UK

Fuel sellers start cutting prices

Customers welcomed petrol price cuts by a number of UK supermarkets

UK drivers are set to benefit after a number of national supermarket chains and an oil company said they were cutting the price of fuel.

Asda said it was cutting the price of unleaded petrol and diesel by 3 pence per litre, while Morrisons said it had cut both prices by 4p per litre.

BP said petrol and diesel at the 310 stations where it controls prices had fallen by 2p a litre on average.

Tesco said it would cut prices by up to 4p, but its prices are set locally.

Sainsbury's said it would look to match the prices of competitors nearby.

Fuel prices have risen in recent months as the price of crude oil has increased. Oil prices hit record levels above $147 a barrel in early July.

However, oil prices have dropped recently, to about $132 a barrel, resulting in a 6% fall in the wholesale price of petrol since mid-July, according to the AA.

Helping hand?

Asda's price change came into effect on Tuesday, making unleaded petrol 113.9p per litre with diesel 128.9p at its 170 forecourts.

Graph showing petrol prices at pump

David Miles, Asda's trading director, said: "We are seeing a more stable reduction in oil prices, allowing us to pass on the savings to customers.

"We urge other retailers to follow our lead at a time when customers need as much help as possible."

Morrisons introduced the price change at its 285 petrol stations on Monday evening. It said it was "ensuring customers reap the benefit [of lower oil prices] by passing on the saving quickly, for cheaper prices at the pump".

BP said pump prices at the 310 sites where it sets the price had fallen by an average of 2p per litre, and some stations had seen a reduction of 4p per litre.

"We don't have a national pricing strategy. We set our prices on a site by site basis in response to the local market and crude oil," said spokesman Mark Salt.

However, BP does not control pricing at around 950 stations that sell BP-branded fuel.


Tesco said that it was cutting prices by up to 4p a litre, although it does not set petrol prices centrally.

A Tesco spokesman added that it had also been offering 5p off per litre to customers who spend at least 50 in store for the past month.

The AA expects fuel suppliers to pass on, not pocket, the saving for the good of UK families, hauliers and the economy
Edmund King, AA

Sainsbury's said its fuel promotion, which will also see it offer 5p off per litre when customers spend 50 or more in store, would start on Thursday 24 July and end on Thursday 7 August.

Hauliers welcomed the moves, which come a week after the government announced it was delaying a 2p a litre rise in fuel duty that had been due to come into force in October.

The AA said that wholesale petrol prices had fallen 6% since mid-July and it urged other fuel retailers to follow the supermarkets' lead and cut petrol prices.

"The AA expects fuel suppliers to pass on, not pocket, the saving for the good of UK families, hauliers and the economy," said AA president Edmund King.

"Should fuel suppliers and retailers appear to be dragging their feet we will seek to expose this."

Ray Holloway, of the Petrol Retailers Association, said independent fuel retailers would be unlikely to respond immediately to the cuts.

"The supermarkets are moving the price in anticipation of further falls in the wholesale price, " Mr Holloway said.

"Independents will pass on those falls in due course."

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