• Friday, July 19, 2024

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Asda now most expensive fuel retailer: report

Asda was charging an average of 2.1p more per litre more for unleaded petrol

FILE PHOTO: Customers fill up with fuel at an ASDA store in London, England. (Photo by Bruno Vincent/Getty Images)

By: Pramod Thomas

ASDA has become the priciest provider of supermarket fuel in the UK, new research revealed. This change comes after the retailer’s new private owners, the billionaire Issa brothers and TDR Capital, decided to depart from its longstanding promise of offering the cheapest fuel on the market.

According to an analysis by the RAC motoring organisation, as of the end of May, Asda was charging an average of 2.1p more per litre more for unleaded petrol compared to competitors such as Tesco, Sainsbury’s, and Morrisons. The price gap widens even further for diesel, with Asda charging 2.5p more per litre on average, report which used data gathered by the Competition and Markets Authority (CMA), said.

Following the acquisition of Asda by Issa brothers and TDR in 2021, the supermarket chain has seen a notable shift in its pricing strategy.

This change in pricing comes in contrast to Asda’s historical commitment to providing the cheapest fuel, often leading the way in price reductions among supermarkets.

The RAC’s senior policy officer, Rod Dennis, noted that while Asda had previously held the title of the most affordable fuel seller, it has now been surpassed by other major supermarkets and independent retailers offering lower prices.

Meanwhile, Asda asserted its position as the most economical fuel retailer at its extensive supermarket locations, while acknowledging its higher pricing strategy at its convenience stores, where the ‘market was different’.

Excluding these smaller outlets, Asda claimed to offer unleaded fuel at an average price of 145.12p, surpassing its closest competitor Morrisons at 145.17p. Meanwhile, Tesco supermarkets were reported to sell fuel at an average of 145.52p. The company also pointed out recent reductions in fuel prices, averaging a decrease of 2.31p per litre in May.

“We remain focused on providing our customers with the best value at the pumps as we grow in the convenience sector. In May, we reduced the price of unleaded and diesel by a combined average of 2.31p per litre,” said an Asda spokesperson.

Concerns over fuel pricing practices have drawn attention from regulatory bodies like the CMA, which has been closely monitoring the market to prevent unfair pricing practices.

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A report by the CMA last year revealed a significant increase in Asda’s target fuel margin, prompting scrutiny into pricing strategies within the industry.

While overall fuel prices in the UK have seen a slight decline, the RAC stressed that the rate of reduction is insufficient compared to the decrease in wholesale costs.

RAC’s Dennis criticised the slow pace of price cuts, stating that drivers continue to face high fuel costs despite market trends suggesting otherwise.

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