Supermarkets set for Fuel Price War

On the 7th July 2010, Morrison´s scheduled a dramatic price cut in both unleaded petrol and diesel which was taken into immediate effect from 8 am on the 8th July 2010.

According to local prevailing rates, the new prices are averaging at 116.3p a liter for diesel fuel meaning that the cost has been cut by 1p, and 114.5p a liter for unleaded petrol meaning a cost cut of 2p.

In the last 7 days Morrison´s have cut their fuel prices twice providing their customers with cheaper prices at the pumps due to falling oil prices. The cost of fuel is generally influenced by the variations of price in regards to oil, and the strength of sterling against the American dollar. These price cuts are possible as the pound has strengthened against the dollar while the price of crude oil has also dropped.

ASDA were quick to re-act to Morrison´s prices cuts to make sure they are maintaining a good level of competition. ASDA slashed their prices to an average of 112.9p for unleaded petrol, and 116.9 for diesel making them the only UK fuel seller to set a flat national rate. They were also confirmed by the AA as being the cheapest source of petrol and diesel within the UK. ASDA commercial director, David Miles, stated: "Our long-standing commitment to British drivers means everyone benefits from our low prices. Let´s hope other petrol retailers don´t penalize people who aren´t lucky enough to live near an ASDA, as so often is the case."

The head of road safety for the AA Andrew Howard has warned that that these price cuts will only be felt in selected locations within the country, primarily in urban locations in the north where most of the ASDA and Morrison forecourts are situated. They feel that these cuts won´t be seen nationwide unless there are local competitive pressures for these firms to face.

Although a lot of drivers within the UK have benefited from these price cuts there are still a large proportion of motorists paying more than more than 120p a liter for both unleaded petrol and diesel. However this could potentially change as it´s predicted that other rivals such as Tesco and Sainsbury´s will soon be entering the competition to spice things up.

published: 14/07/2010