Asda sparks price war with petrol and diesel 99.9p a litre

The supermarket giant said there was no need to charge more than a £1
12 April 2012

A new petrol price war kicked off today when a supermarket chain slashed the cost of a litre of unleaded and diesel to less than £1.

Asda said all 176 of its forecourts dropped petrol and diesel forecourt prices to 99.9p compared with a national average of 103.8p for unleaded and 105.1p for diesel.

It is the first time petrol has cost less than £1 since the start of June, saving drivers about £2 to fill up a typical family car. The saving is even bigger for the 40 per cent of drivers with diesel vehicles, with about £2.50 off the cost of a tank of fuel.

The move is expected to be followed by other supermarkets, particularly Morrisons. David Miles, Asda's commercial director said: "There is no justification for any major retailer selling fuel above £1 per litre — that is why we are delighted to be able to reduce both petrol and diesel to 99.9 pence per litre for all our customers."

The start of a new round of forecourt price-cutting follows a period of fast-falling oil prices. The price of a barrel of oil has slumped by more than $10 to about $62 over the past week on fears about the stalling world economic recovery.

That in turn has fed through to falling wholesale petrol prices, which effectively determine fluctuations in pump prices. The wholesale petrol price had fallen from $665 a tonne at the end of June to about $595 a tonne earlier this week.

Drivers have started to complain that oil companies and other petrol retailers have once again been slow to pass on the savings to ordinary motorists.

Luke Bosdet of the AA said petrol prices had been due for a fall after sticking several pence above the £1 level for the past two months. The average price rose almost 5p between mid May and mid June, the second highest monthly rise on record.

Yesterday the Government came under pressure from MPs to scrap the scheduled 2p rise in fuel duty in September to help ease the pressure on motorists.

Commons Leader Harriet Harman admitted that there was "real concern about the increase in fuel prices, not only the cost of petrol at the pumps but also the effect on people in their homes and businesses of the increase of the oil price".

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