The media widely reported over the weekend that UK supermarkets have slashed their fuel prices, with ASDA leading the herd. This might come as a relief to motorists following recent price rises, particularly those resulting from the two catastrophic hurricanes affecting US oil production. However, the reality of figures across the country seems to show only a very slight movement in price – so is there really a fuel price war?
Late last week a number of media outlets, including This Is Money, reported that ASDA was dropping 2 pence per litre from the price of unleaded petrol and 1p a litre from the price of diesel. The move came despite sharp rises in prices following Hurricane Irma and Harvey having caused so much disruption to the oil industry in the US.
Interestingly, the price drop was reported to come just a few hours before the AA released a report that criticised retailers for raising their prices after the natural disasters, despite a reduction in wholesale costs for over two weeks. AA fuel price spokesman Luke Bosdet observed that, “the price cuts should have happened earlier as wholesale costs had been falling for the past two-and-a-half weeks.”
The planned AA press release revealed that two of the ten main fuel retailers, including a ‘leading supermarket,’ had in fact added more than 4 pence per litre to their fuel prices in the last month.
The price of oil
The original changes came after experts predicted that the price of fuel would rise by 4p a litre due to the effects of the hurricanes. Now, it seems retailers moved early to collect this increase. However, the reality was that the wholesale cost rose from 34.5p to 38.3p at the end of August and has since been gradually moving in a downwards direction.
This means that the retailers who increased their prices did so ahead of the actual increases that they would have seen, pocketing a nice amount of extra cash due to the situation. Reports added that in the face of criticism from the AA, ASDA was cutting back its prices.
What really happened to the price of fuel?
A study of the actual price at the pumps shows a surprisingly different position to the reported price war. In fact, it seems to indicate that prices are actually still rising.
The September average price for diesel at ASDA petrol stations was 116.0 pence per litre, while the unleaded price was 115.4 pence. These are the lowest prices of any of the top ten fuel retailers (Sainsbury’s was in second place for both, while Morrisons and Tesco followed with similar prices).
In the wake of the reported supermarket price war, PetrolPrices decided to look into what actually happened to fuel prices. To our consternation, we found that, as of Monday 25 September, ASDA’s price for diesel stood at 116.4 pence per litre, while its unleaded price was 115.8 pence. Both of these were higher than the average for September to date, despite reports of a price war.
Of the main retailers, only Morrisons’ price for diesel had decreased compared to the monthly average figure, dropping from 117.0 pence per litre to 116.6 pence – definitely not the much-reported 2p decrease. For unleaded, only Sainsbury’s price fell, from 115.9 pence per litre to 115.8 pence. A number of other retails were still selling at a price that matched the September average. Indeed, as at Monday 25 September, the majority had actually slightly increased their prices versus the average cost for the month so far.
Don’t believe everything you read!
Despite reports saying that prices would be falling and that other supermarkets would be following ASDA’s lead, it seems that the average figures across the country don’t tell the same story. We shall see what happens in the remaining few days of the month and early October to see if this alleged price war manifests on the actual price at the pump. In the meantime, remember to use the PetrolPrices app regularly to ensure that you get the best price in your local area.
Did reports of a ‘price war’ over the weekend see you rushing to the pumps to fill up? Did you notice prices in your area actually dropping? Leave a comment to share your experiences.