Tesco has become the latest supermarket to cut its petrol and diesel prices.
The retail giant has cut the price of a litre of unleaded by 6.5p and knocked 4.5p off the cost of a litre of diesel after rival chains Asda and Sainsbury’s dropped their prices.
Asda cut a total of 9p per litre from petrol and 7p from diesel in a series of cuts last week, with Sainsbury’s also making average forecourt reductions of 5p per litre in the wake of falling wholesale costs.
Asda’s cuts brought its pump prices down to 174p a litre for petrol and 185p for diesel, well below the UK average.
Morrisons has also said it is reducing prices “by several pence” but did not give specific figures.
The UK’s “big four” supermarkets, which are the country’s biggest fuel sellers, have previously been criticised for failing to pass on the recent fall in wholesale prices. The price paid by retailers has fallen by 19p per litre in the last seven weeks but consumers have seen only a fraction of that reflected at the pumps.
The average price of petrol is currently 182p per litre, while diesel is 192p per litre - down from record highs of 190p and 199p respectively on 1 July.
Announcing the cuts. Tesco chief product officer Ashwin Prasad said: “We know how tough rising fuel bills have been for households across the UK, and so we hope that these price cuts will go some way to help.”
RAC fuel spokesman Simon Williams welcomed the latest reduction but said that drivers were still not being treated fairly by retailers.
He said: “This is good news for drivers as it will cause other retailers to reduce their prices, but it comes too late as the wholesale price of petrol has fallen significantly over the last seven weeks. This means hard-pressed motorists have been losing out while retailers enjoyed 20p a litre margins – far higher than normal.”
The AA’s Luke Bosdet said that thanks to its major market share, Tesco’s move could make a “dramatic difference” to the UK average price but added that even with the latest cuts, only Asda was fairly reflecting the wholesale situation.
He commented: “While one supermarket has set its prices at roughly where the pump prices should be, others continue to lag behind badly in many places.
“There are also more savings in the tank, with wholesale prices over the past week pointing to the potential of 25p off the record petrol high. Once the 5p VAT reduction that comes with that wholesale fall is factored in, that would take the average price of petrol towards the 165p-a-litre mark.”
Historically, supermarkets have offered the cheapest fuel prices and been among the first to drop their costs as they battled for customers. However, during the current cost of living crisis, they have focused on grocery prices to win over consumers and independent retailers have led the way in cutting fuel costs.
Recent RAC research found that of the filling stations whose prices most accurately reflected the falling wholesale fuel costs, only a handful were run by the major supermarkets.