Tesco, Asda & more accused of driving fuel prices up by not passing on savings06/14/2022
Charlie Stayt and Dominic Raab clash over petrol prices
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The prices of petrol and diesel have hit record highs in the UK. As of today, motorists are expected to pay 185.04p per litre of petrol and 190.92p per litre of diesel with the latest RAC Fuel Watch indicating that both prices are still likely to rise.
The cost of filling up an average 55-litre family car went above £100 for the first time ever last week.
And, the crisis is not showing any signs of slowing down.
Several motorists reported that they even spotted some filling stations asking for over £2 for a litre of fuel.
And now, Darren Briggs, chief executive of Ascona Group, has claimed that companies such as Tesco, Sainsbury’s, Morrisons and Asda are failing to pass on savings to drivers despite buying fuel more cheaply than independent rivals.
Mr Brigg’s company operates across 59 locations across the UK.
It is in turn the seventh-largest petrol station operator in the country.
And, the business owner has now questioned why some of Britain’s biggest supermarkets are not passing the savings onto their customer.
He told The Telegraph that the wholesale price supermarkets pay is typically based on a lag of up to three weeks, allowing them to increase profit margins at a time when oil prices are rising sharply.
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Independent operators, on the other hand, mostly pay for fuel based on the previous week’s average price.
Around a quarter are forced to pay the spot price on the day the fuel is delivered.
This in turn means that independent operators must increase their prices more quickly.
And that gives supermarkets the chance to make bigger profits if they follow suit.
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Mr Briggs said: “If they’re benefiting from a three-week lag, and they’re matching independent retailers on price – you do the maths.
“It would be a lot easier and a lot safer for everyone if these supply agreements were based on a previous week’s average.”
However, Asda hit back saying that it is the “price leader” and was the first forecourt operator to pass on cuts to fuel duty.
A spokesperson for Asda said: “Asda is the price leader in the supermarket fuel sector and despite significant increases in wholesale fuel costs our average petrol price today is 8p per litre cheaper than independent operators.
“We were also the first retailer to pass on the cut in fuel duty and will continue to do all we can to offer customers the lowest prices at the pumps.”
Forecourt operators have been criticised for being quick to increase the price-per-litre when wholesale prices rise, but slow to reduce them when they fall.
Mr Briggs said: “What we do on some of our sites is that when we hold back [price increases] we actually take a hit on our margin, to remain competitive.
“There are times when we will take a hit on our margins in a fast-rising market because we’re basically being hit by that three-week advantage.
“So of course, we lose margin.
“And then when the market falls, then we act slower.
“And we offset that margin between the two. So we’ve lost in a rising market, [and] we’ve slightly gained by the parachute.”
Express.co.uk has contacted Tesco, Sainsbury’s and Morrisions for comment.
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