BP and UK supermarket chains urged to cut petrol prices
Motoring organisations on Wednesday called on BP and the big four supermarkets to cut their petrol prices and provide greater help to Britons struggling with the cost of living crisis.
The AA claimed BP — which unveiled its highest quarterly profits for 14 years on Tuesday — was charging “what they can get away with” at petrol stations, while the RAC accused Asda, Wm Morrison, Tesco and J Sainsbury of an “unwillingness to cut their prices to a more reasonable level”.
The demand for fuel price cuts comes as the Bank of England is widely expected on Thursday to increase interest rates, possibly by half a percentage point, to curb surging inflation.
The Resolution Foundation think-tank said it was “plausible” consumer price inflation could hit 15 per cent in the first quarter of next year, partly because of rising gas prices.
Motoring organisations are concerned that fuel retailers are not fully passing on a recent fall in wholesale prices to their customers on garage forecourts.
The RAC said wholesale petrol costs had fallen by 20p a litre since early June, following a drop in the value of crude oil, yet the average price paid for unleaded fuel by drivers had only decreased by 9p.
Edmund King, AA president, said BP — which announced underlying earnings of $8.5bn for the second quarter — should use its profits to lower fuel prices, in a move that would trigger wider cuts on forecourts.
“It is right to assume if a company is making so many billions, why are their profit margins at the pumps higher than other retailers,” he added. “Surely there is more to go around to help people out.”
AA calculations show that BP prices last month averaged 191.17p per litre for petrol, higher than any other of the top 10 UK fuel retailers, including Shell and the big four supermarkets. The UK average was 188.43p.
“If BP was more proactive in their pricing, it would mean that Shell and the others would follow suit, it would bring prices down, it would make them more competitive,” added King.
There are some 1,200 BP-branded service stations in Britain, although the energy company said it only sets the price of fuel at the 300 sites that it operates.
BP said: “At our sites at which we control pricing, we aim to price competitively, taking into account local factors for each site, including competitors.”
BP said on Tuesday it had no plans to make fuel price cuts as the company was set to pay an energy profits levy that the government announced in May to help ease the cost of living.
Meanwhile the RAC pointed the finger at the big four supermarkets, which are responsible for about half the fuel sold to drivers.
Supermarket executives insisted they bought their fuel further in advance than smaller independent forecourts so it took them longer to pass on both reductions — and increases — in wholesale prices.
They also privately claimed their forecourts were still cheaper than those of the energy companies. Some groups, including Asda, have recently cut prices.
The British Retail Consortium, a trade body that represents all the big supermarkets, said its members “understand the cost pressures facing motorists” and would pass on cost reductions “as they feed through the supply chain”.
Rishi Sunak, the former chancellor who is running against foreign secretary Liz Truss to be the next Tory leader and prime minister, has previously called on companies to pass on falls in the cost of oil to consumers at the pumps. “That’s still his strong message,” said his spokeswoman.
Sunak said in June, while still chancellor, that he would consider another cut to fuel duty after reducing it by 5p a litre in March.
The UK competition regulator this summer launched a market study into fuel prices.
The Competition and Markets Authority found “cause for concern” in a rise in refining margins — the difference between the price of crude and fuels such as petrol and diesel.
Additional reporting by George Parker and Valentina Romei