June Petrol Price Update

Phoney supermarket price war hits southern drivers

18 June 2010

Phoney supermarket price war hits southern drivers

Large swathes of southern England have suffered from an unprecedented disparity in petrol prices between neighbouring towns over the past month, the AA's latest mid-monthly Fuel Price Report reveals.

The average price of petrol in the UK has fallen from the all-time high of 121.61 p/litre in mid-May to 118.08 p/litre now, largely reflecting a fall in wholesale costs of up to 4p a litre.

However, in large areas of the South, South East, Home Counties and rural Midlands, the cheapest supermarket petrol price is 119.9p a litre, down just 2p over the month – and still above the UK's 2008 peak of 119.7p.

The average price of diesel has fallen to 120.52 p/litre, down from its recent high of 123.08 p/litre in the third week of May. Its all-time record remains 133.25 in July 2008.

Despite a price war, that broke out mid-May and brought the lowest price for petrol down to 113.9p a litre in towns with Asda fuel stations and 115.9p in others, many built-up areas missed out.

For the first time ever, living in the wrong town could mean paying 4p to 6p a litre or £2 to £3 a tank more for petrol compared to a neighbouring town – drivers have complained in previous years about paying 2p a litre more compared to a town down the road.

Over the past month, around a million people in towns across the southern half of the UK have seen a two-car family's monthly petrol costs average up to £12.74 more than for a similar family living in the same area.

Examples

(cheapest supermarket petrol prices on 14 June, populations in brackets):

  • M4 corridor, Berkshire: Bracknell (100,000) and Newbury (28,000) 119.9p a litre. Reading 113.9p
  • Blackwater Valley, Surrey/Berks: Farnham (38,000), Aldershot (34,000) and Camberley/Sandhurst (30,000) 119.9p. Fleet 115.9p
  • Home Counties: Stevenage (80,000), Bedford (80,000) and Harlow (79,000) 119.9p. Hatfield, Welwyn Garden City and Milton Keynes 115.9p
  • Gatwick: Crawley (100,000) and Horley 119.9p
  • Channel ports: Folkestone (53,000), Dover (30,000) and Ramsgate (40,000) 119.9p. Canterbury 113.9p
  • Midlands: Worcester (94,000) and Stroud (47,000) 119.9p. Bromsgrove 115.9p
  • Other southern: Andover (52,000) and Chichester (24,000) 119.9p

Regional average petrol prices show that areas from the Midlands northwards, the heartland of supermarkets selling cheaper fuel, have seen the 4p drop in wholesale prices largely passed on at the pumps, while drivers further south have been short-changed by a penny. Londoners have come off worst, seeing prices fall on average by just 2.5p a litre.

Although the number of independent petrol stations undercutting expensive supermarkets is not as great as drivers might hope, Shell and Jet fuel stations are on average cheaper than some of their rival supermarket outlets.

Comment

"Wholesale petrol prices tumbled from around 40p a litre in early May to around 36p by the 24th. Although Asda and Morrison largely passed on the entire saving, other supermarkets have been much more selective as to which customers are enjoying the full respite from record high prices," says Edmund King, the AA's president.

"Unfortunately, with oil prices back above $75 a barrel, the AA is expecting wholesale prices to rise again – which only makes the failure to pass on cost cuts all the more galling.

"Drivers are right to ask how a small rural petrol station between Farnham and the M3 can sell petrol at 115.9p a litre, and stay in business, while a major supermarket in the town centre, with all its buying power, charged 119.9p."

Overall, the average cost of petrol ranges from 116.8p a litre in Yorkshire & Humberside to 119.3 in London. The cheapest diesel is sold in Yorkshire and Humberside at 119.5p a litre and the most expensive in Northern Ireland.

View the full AA Fuel Price Report »

UK pump price data provided by Experian Catalist

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18 June 2010