Petrol prices rise as Asda accused of profiteering

Drivers are battling higher motoring costs with fuel prices increasing for the third month in a row.

Petrol costs rose by almost 2p per litre in March with average charges up from 144.62p to 146.48p at forecourts, according to data from RAC Fuel Watch.

The figures also reveal that debt-laden Asda is no longer the UK’s cheapest supermarket petrol retailer but one of the dearest.

Average petrol prices have jumped almost 6p since the start of the year with rises back in January and February. Diesel prices are up by more than a penny with average costs rising from 154.68p to 155.99p.

The RAC found that among the big four supermarkets which dominate UK fuel sales, Tesco had the cheapest unleaded on 31 March at an average of 142.7p across its 511 forecourts, while Asda had the most expensive at 145p.

It said Asda, which for many years prided itself on selling the lowest-priced supermarket fuel, had a 34p price difference between its cheapest and most expensive petrol.

Motorists also had a 33p price difference between its cheapest and most expensive petrol. The grocer charged 139.7p at nine forecourts, four in Northern Ireland, and 172.9p at junction 29A of the M1 near Sheffield – a Shell-branded site operated by Asda.

Asda said the figures included EG garages before they were converted to Asda distorting the average price. Prices fell after the switch it said adding that a like-for-like comparison saw Asda’s prices comparable to rival supermarkets.

Asda has faced criticism from MPs and the Competition and Market’s Authority (CMA) regulator about its high prices and profit margins. The CMA report said Asda’s fuel margins rose by 6p per litre between 2019 and 2022.

In January, Jonathan Gullis, a Tory MP and member of the parliamentary Trade and Business committee, accused Asda of exploiting the cost-of-living crisis by raising prices at the forecourt, claiming that “people were being ripped off at the pump”.

He highlighted concerns of drivers that Asda was profiteering fuel during the last few years, which have been especially challenging for drivers. Asda’s co-owners have denied claims of profiteering.

According to the RAC, Sainsbury’s sold the cheapest unleaded at 136.9p at two sites in Wolverhampton and at Dungannon in Northern Ireland. It also pointed out that Tesco sold its lowest price – 138.9p – at 30 separate forecourts. By comparison Asda offered its lowest petrol price of 138.7p at one of its 658 forecourts.

The motoring body welcomed the fall in the average retailer profit margin on petrol from 10.5p a litre at the start of March to under 8p. While the cause is most likely to be the increase in the wholesale price of petrol, the RAC said the competition watchdog’s scrutiny of the petrol retail market may also a key reason.

The CMA’s latest report last week found evidence of weak competition among fuel retailers. Dan Turnbull, of the CMA said: “Drivers are feeling the pinch as fuel prices have been edging up since January. We’re particularly concerned by high margins which indicate weakened competition and are not a good sign for drivers.”

Last year, a report by the CMA revealed some retailers failed to pass on savings in oil prices – charging drivers 6p more per litre for fuel, which amounted to £900m in extra costs in 2022.

It called for a scheme which legally requires petrol stations across the UK to share real-time price information so that drivers can better choose where to get cheaper fuel.

The Government launched a consultation on the scheme, dubbed Pumpwatch, in January but the CMA said the most recent figures reinforced the need for statutory powers to be in place ‘as soon as possible’ to ensure drivers get a better deal.

The Petrol Retailers Association (PRA) defended its members pump prices and criticised the CMA’s analysis for failing to include rising costs which were an important factor in rising pump prices. It said the CMA recognised the omission of rising costs in its report.