The UK’s priciest supermarket for fuel has been identified as Asda, according to a recent analysis by the RAC. The findings indicated that, as of May’s end, Tesco, Morrisons, and Sainsbury’s were selling petrol at an average of 2.1p less per litre than Asda. The disparity was even more pronounced for diesel prices, with Asda levying an average of 2.5p more per litre.
Asda has long held its position as the supermarket offering the most affordable fuel, often leading the pack in reducing pump prices. Nonetheless, this changed in 2021 when the supermarket was purchased by billionaire brothers, the Issas, in partnership with private equity firm TDR Capital.
The acquisition of UK and Irish operations of petrol station giant EG Group, owned by the Issa brothers, by Asda in May of the previous year was announced by Mohsin Issa as a move to extend the reach of Asda’s competitively priced fuel. A report released by the Competition and Markets Authority (CMA) in July the previous year implied that Asda’s target fuel margin – the difference between the cost of fuel and the pump price – was projected to be triple that of 2019’s figures by 2023.
Even so, Asda does not have “a strategy to bump the price of fuel or to make a larger profit on fuel,” according to TDR Capital’s managing director Gary Lindsay who told so to the Commons’ Business and Trade Committee in January.
Analysis by the RAC also uncovered that petrol prices at all UK forecourts fell on average by 2.4p per litre last month, dropping to 147.9p, while diesel prices slumped by 4.5p per litre to 153.6p.
Despite the fall in fuel prices, Rod Dennis, RAC senior policy officer revealed his alarm about the slow pace of decline despite dwindling wholesale costs. “A month of decreasing fuel prices should be seen as a good one for drivers but the sheer time it is taking for any meaningful price reductions to reach forecourts is if anything a continuing cause of concern,” he said.
Dennis noted that it’s “a case of too little too leisurely” when it comes to pump price cuts, with most drivers still getting a raw deal every time they refuel. The “rocket and feather” phenomenon is familiar territory, with pump prices slowly dipping when they should be plummeting.
He also observed that despite the merger and the fuel price pledge, Asda’s fuel is no longer the cheapest, with the other three major supermarkets, as well as some independent ones, now offering lower prices.
Asda disclosed its unique pricing strategy at its supermarket and “convenience” forecourts. A spokesperson said, “Asda was the price leader in the supermarket fuel sector in May and we remain focused on providing our customers with the best value at the pumps. …We reduced the price of unleaded and diesel …and we are trialling ‘earn on fuel’ on the Asda Rewards app, where users can get 0.5 per cent of their fuel spend back in their Asda Rewards Cashpot.”
