Pump prices fell around three pence per litre through June, with the average unleaded price dropping below £1.45 per litre and diesel below £1.50 per litre. During the second half of June, Morrisons consistently had the lowest price of all four supermarkets on both fuel grades.
However, this decrease occurred when crude oil wholesale prices increased from a low of $77.50 in early June to $86.60 by the end of the month. Until now, the forecourts have appeared to not pass this increase on to motorists and have either absorbed the increase in cost or are yet to be affected.
On July 1st, prices at 25% of Morrisons locations increased. These increases, while not unexpected given the status of the market and Morrisons’ position as the lowest-priced supermarket, raise a crucial question: How will the other supermarkets respond? The potential for a ripple effect across the industry, with other supermarkets following suit, is a cause for concern.
This may open the door for others to increase prices and pass on the additional costs to UK motorists. Particular attention will be paid to Tesco, which was toe-to-toe in early June with Morrisons as the price leader but fell away in the second half as retail prices slowly decreased. Tesco may see this as an opportunity to hold firm and try to lead once more on price, or they, too, will start to pass increases in cost price on to motorists.
Asda, which has been less competitive in recent times, is now much closer to the other three supermarkets. In early June, Asda’s prices were on average over a penny higher than the other supermarket brands, but this difference has now shrunk to under half a penny. If Asda continues to become more competitive, this could help to limit the price increases from Morrisons, Tesco, and Sainsbury’s, offering a glimmer of hope for motorists.
The 11% increase in crude oil prices may well be the main driver of fuel prices in the coming days and weeks. Don’t be caught off guard if you see prices creeping up by a penny or two. Stay empowered by checking the PetrolPrices app, the most comprehensive collection of UK forecourt prices, to stay up to date. If you notice a price change, help others by updating the app, contributing to a more informed community of motorists.
Why is the fuel at some Morrison’s filling stations different to others, I recently visited a Morrisons in Taunton and was happy with 139.7/l because at home it was 143.7/l but then visited Tewkesbury and found it at 137.7/l. Surely it would be fairer to have one price for the whole country. Morrison’s tell me the price is determined by volume sold, but I hardly think rural Gloucestershire is going to sell more that a Somerset town on the M5. Any ideas, anyone?
Who do we believe, Petrol Prices or the RAC? The RAC claim oil prices are still coming down but they are not being passed on. The reason for the latest increase is simply the greed of the forecourts; kids are going to be on holiday from school and these increases happen every year!