Supermarkets launch New Year petrol price war

Tesco, Asda and Sainsbury's are all set to cut prices by 2p per litre. Picture: Gareth Easton

Tesco, Asda and Sainsbury's are all set to cut prices by 2p per litre. Picture: Gareth Easton

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THREE major UK supermarkets are ushering in 2015 by cutting petrol and diesel prices.

Sainsbury’s, Tesco and Asda have all said they would reduce prices by 2p per litre from today.

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Since September, fuel prices fallen a number of times at forecourts across the country.

The cuts will see Asda customers, for example, pay no more than 107.7p a litre for petrol, with diesel at 114.7p a litre.

With world oil prices plunging, this is Asda’s 13th cut since the end of September, taking in total 19p a litre off petrol and 15p a litre off diesel.

Asda’s petrol trading director, Andy Peake, said: “We’re pleased to be giving drivers some early new year savings.”

Avishai Moor, Sainsbury’s head of fuel, said: “This is another way in which we can offer our customers real value for money when they fill up on New Year’s Day.”

The AA said supermarkets were responding to competition and a fall in wholesale fuel prices.

Spokesman Luke Bosdet added that the latest reductions were “in line with wholesale price falls”.

He went on: “The UK average price for petrol is currently around 113p per litre.

“However, just how far it falls is anyone’s bet. Current indications are that the magical £1-per-litre average price across the UK is still looking unlikely in the short term.”

Supermarkets have been responding to price pressures from independent petrol retailers, he added.

Crude oil trading prices have also fallen dramatically. On Monday, the average pump price for unleaded petrol hit 113.7p per litre, its lowest since March 2010.

Meanwhile, Asda’s chief executive Andy Clarke has admitted 2015 could be challenging for a number of supermarkets, warning he had never seen profitability fall so quickly in the UK supermarket sector. He said discount supermarkets have had a striking impact on retailing.

“The level of profitability decline in some retailers over the course of 2014 – we’ve never seen it before,” said Mr Clarke.

Analysts Kantar Worldpanel say discount stores Aldi and Lidl have reached a record combined market share of 8.6 per cent of all shopping at major UK grocery chains. Their rise has come at the expense of the “Big Four” supermarkets, Tesco, Asda, Sainsbury’s and Morrisons.

Supermarket expert and Loyalty magazine editor Annich McIntosh described the changes to the supermarket sector as “profound”. She said: “There are a lot of very worried executives of food stores out there. This modern shopper is unlike any we’ve known before – a person with a mobile phone who can compare prices instantly.”

Mark Price, however, the managing director of Waitrose, said he was more positive about the year ahead. He said discounters were not having an impact on Waitrose sales.

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