Petrol price wars ease as forecourt retailers see profits rocket
Supermarkets such as Asda have eased competition in their fight to attract customers to their fuel and diesel pumps, as prices and profits rocket.
Data from the RAC showed that last week’s price of petrol was 146.9p while the price of diesel continued to hike, reaching a record 150.80p.
According to a Times analysis, the increase in prices has led to a 16.7 per cent margin, two times the profit earned when Asda was bought by UK billionaires the Issa brothers in October last year and three times more compared with 2019.
A senior executive from a rival supermarket chain confirmed the end of the fuel price war, telling the outlet that Asda’s owners would prioritise higher margins instead of driving the prices down, competing with rivals.
The easing of competition will continue to impact motorists, and could set a dangerous precedent, Luke Bosdet, spokesperson at motoring association AA, told the Times.
“Previously, the market would wait until Asda or Morrisons announced a price cut before starting to move. Without that initial kick, pump prices have stagnated, and that is a potentially worrying development if it sets the pattern for the future.
“Meanwhile, the majority of the non- supermarket forecourts have been very happy to play along.”
It follows comments made by RAC against petrol retailers, accusing them of raising prices despite plummeting wholesale costs, Morning Wire reported.
The company said retailers are “taking drivers for a ride”, hurting them “at the worst possible time” with Christmas around the corner.
Believing market competition is not working, the motoring group has called on the government to step in and reduce pressure on consumers, asking retailers the reason behind such a surge in prices.