Asda has become the UK’s highest-priced supermarket fuel seller. This is after its private owners abandoned the retailer’s long-held promise to be the lowest on the market.
According to an analysis of the RAC motoring organization, the retailer, which will be bought by billionaire Issa Brothers and their private equity partners TDR Capital by 2021, charged 2.1p per litre on average more for unleaded gasoline than its rivals Tesco Sainsbury’s, Morrisons, and Tesco at the end May.
According to a study based on data collected by the Competition and Markets Authority, the difference between average diesel prices and petrol prices was even greater, measuring 2.5p per litre. The CMA has been closely tracking fuel prices in in an effort to make sure motorists aren’t being fleeced.
The Issa Brothers made their fortune in petrol forecourts. They folded a part of EG Group (their forecourts company) into Asda after acquiring the supermarket chain. Mohsin ISSA said that the deal, which was made in May 2023 would allow him to provide “Asda’s highly competitive fuel” for more customers.
The RAC stated that Asda has “prided themselves on selling the cheapest gasoline” for many years, often being the first grocery to reduce pump prices.
Rod Dennis, senior policy officer at the RAC, stated: “Despite the promise made when Asda was subjected to a merger a few years ago, Asda is no longer the leader in selling the cheapest gasoline.
The other three major supermarkets as well as a few enterprising, independent stores now offer lower prices.
Asda claimed to be the cheapest fuel retailer in its large supermarket outlets, but it admitted that it charged higher prices in its convenience stores where the market is different.
According to the report, excluding these smaller outlets Asda offers unleaded gasoline at an average of 145.12p. The next cheapest supermarket is Morrisons with 145.17p. Tesco sells fuel on average for 145.52p.
Asda’s spokesperson stated: “We are committed to providing the best possible value for our customers at the pump as we continue to grow in the convenience industry.” In May we cut the prices of unleaded fuel and diesel by an average of 2.31p a litre.
CMA published a report last July stating that Asda’s target fuel margin, the difference between the price of fuel they paid and the pump prices, was three times greater in 2023 compared to 2019.
Gary Lindsay, TDR Capital’s managing director, told the House of Commons Business and Trade Committee in January that Asda had no “special strategy” to increase the price of gasoline or make more profit from fuel.
According to the RAC’s analysis, petrol prices in all UK forecourts fell on average by 2.4p a litre over the past month. Diesel prices dropped by 4.5p per litre, to 153.6p.
Dennis stated that the pump prices should fall much faster in order to reflect a decrease in wholesale costs.
He said: “When the much-needed price cuts are made, it is sadly too little, too slowly, and most drivers get a terrible deal each time they fill up. Once again, we’re in a classic “rocket-and-feather” territory with the pump prices barely falling when they should be dropping like a rock.”
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