Asda is now the UK’s most expensive supermarket fuel seller, research shows, after the retailer’s private owners ditched its long-held pledge to be the cheapest on the market.
The retailer, which was bought by the billionaire Issa brothers and their private equity partner TDR Capital in 2021, charged an average 2.1p a litre more for unleaded petrol than rivals Tesco, Sainsbury’s and Morrisons at the end of May, according to an analysis by the RAC motoring organisation.
The difference in average diesel prices was even steeper, at 2.5p a litre, according to the study using data gathered by the Competition and Markets Authority (CMA) which has been closely monitoring fuel prices in an effort to ensure motorists are not being ripped off.
The Issa brothers made their fortune from petrol forecourts. After acquiring Asda they folded part of their forecourts business, EG Group, into the supermarket chain. At the time of the deal in May 2023, Mohsin Issa said it would enable him to offer “Asda’s highly competitive fuel” to more customers.
The RAC said that for many years Asda “prided itself on selling the cheapest fuel”, often being the first supermarket to cut pump prices.
The RAC’s senior policy officer, Rod Dennis, said: “Asda no longer holds the crown for selling the cheapest fuel despite the pledge made when it was subject to a merger a year ago.
“The other three major supermarkets, as well as some enterprising independents, now offer lower prices.”
Asda said it was still the cheapest fuel retailer at its large supermarket outlets but admitted it charged higher prices at its convenience stores, where the market was different.
It said that if those smaller outlets were excluded Asda offered unleaded fuel at an average price of 145.12p compared with the next cheapest supermarket which it said was Morrisons on 145.17p while Tesco supermarkets sold fuel for an average 145.52p.
An Asda spokesperson said: “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.”
The CMA, which last month gained the power to monitor the fuel market and report malpractice to the government, published a report in July last year stating that Asda’s target fuel margin – the difference between what it paid for fuel and the pump price – was three times higher in 2023 than it had been in 2019.
after newsletter promotion
In January, TDR Capital managing director Gary Lindsay told the House of Commons’ business and trade committee that Asda did not have “a particular strategy to bump the price of fuel or to make a larger profit on fuel”.
The RAC analysis found that across all UK forecourts, the price of petrol fell by an average 2.4p a litre last month to 147.9p. Diesel prices dipped by 4.5p a litre to 153.6p.
Dennis said pump prices should be falling much faster to reflect a decline in wholesale costs.
He said: “When it comes to much-needed pump price cuts, it’s sadly a case of too little too leisurely, with most drivers still getting a miserable deal every time they fill up. We’re once again in classic ‘rocket and feather’ territory, with pump prices only trickling down when they should really be falling like a stone.”
Source: theguardian.com
