March Petrol Prices

Contaminated petrol may have held back volatile fuel price

Supermarket reaction to contaminated petrol may well have softened the potential financial blow caused by rising oil prices and petrol shortages in the United States, the AA's fuel price report for March indicates.

Attempts to restore driver confidence in supermarket fuel, including full-page national newspaper adverts and leaflets at superstores, have led to supermarkets now charging on average 2.3 pence per litre less for petrol (87.2 ppl) compared to what the petrol retail market as a whole now charges (89.5 ppl). This is nearly double last month's difference of 1.2 pence per litre.

Supermarkets affected by contaminated fuel raised their average petrol prices by up to 1.8 pence per litre between mid-February and mid-March, while increases at non-supermarket outlets were at least 2.1 pence per litre. However, Sainsbury's, the one supermarket untouched by the fuel contamination, recorded the lowest petrol price rise for the month – a half penny less than its nearest rival and nearly 2.5 pence less than the brand with the biggest average price increase.

With oil prices climbing above 60 dollars a barrel and unexpectedly large falls in US petrol stocks pushing up the prices, the average price of petrol in the UK has risen 2.6 pence per litre, from 86.9 in February to 89.5 now. The average price of diesel has risen a more moderate 1.8 pence per litre, now selling at 92.7 pence per litre.

AA Public Affairs' comment

"Although the average petrol price rise adds another £1.30 to the cost of refilling a typical 50-litre fuel tank compared to a month ago, the rise could have been worse," says Paul Watters, head of AA Public Affairs.

"The difference between the cheapest and most expensive retailers has grown from 2.82 pence per litre last month to 5.09 in March, with the supermarkets raising prices by a lower margin than the rest and softening the impact of inflationary pressures. Perhaps the best indication of this comes with northern regions losing their long-held position as the cheapest places to buy petrol in the UK. This now goes to London and the South East – the areas worst affected by the fuel contamination scare."

Watters adds: "This huge variation between prices in what is usually extremely tight competition underlines the potential volatility of the market, and the vulnerability of consumers to sudden changes in prices. Adding a pound or more to the cost of each trip to a petrol station is one of the main reasons that 83 per cent of motorists place cost as their number one motoring concern – something for the Chancellor to bear in mind as he plans next week's budget."

Petrol – brand comparison

(Average prices on 14 March 2007)

BRAND This month
Last month
Asda 86.72 84.91
BP 90.20 87.47
Esso 89.58 86.82
Jet 88.59 86.47
Morrisons 87.04 85.56
Murco 91.81 87.61
Sainsbury 86.49 85.52
Shell 88.64 86.30
Tesco 87.72 86.13
Texaco 91.10 87.73
Total 89.34 86.87
UK average 89.47 86.90

Diesel – brand comparison

(Average prices on 14 March 2007)

BRAND This month
Last month
Asda 89.67 88.18
BP 93.46 91.47
Esso 92.43 90.66
Jet 91.82 90.17
Morrisons 91.14 89.38
Murco 93.77 91.68
Sainsbury 89.96 89.05
Shell 91.87 90.16
Tesco 91.30 89.82
Texaco 93.74 91.73
Total 92.58 90.63
UK average 92.70 90.9

Download the 2007 fuel price reports here

You will need Microsoft® Word® to download these reports.

(16 March 2007)