30 September 2014
4 Mins read

Sainsbury’s 5p cut on petrol ‘could start price war’

Sainsbury’s has slashed fuel prices by up to five pence per litre, sparking a supermarket price war.

Sainsbury’s made the first move in a supermarket price war for fuel, as the company has announced it slashed five pence off every litre of petrol and diesel from today (September 30th).

The firm has not revealed if there will be a time limit on the reduction, which will affect the prices of fuel on all of its 294 petrol stations.

Soon after Sainsbury’s made its announcement, Asda declared it would also be lowering the price of its petrol and diesel by one pence and two pence per litre respectively. Tesco quickly followed suit, revealing it would be cutting the price of fuel by up to five pence per litre. The pressure is now on for Morrisons to announce a reduction.

The reductions reflect the drop in the price of wholesale crude oil and a strengthening of the pound, caused directly by the people of Scotland voting ‘no’ in the recent referendum for independence.

Simon Williams, RAC fuel spokesperson, commented: “The wholesale price of both petrol and diesel has been low for around three months and as a result motorists have been enjoying some the cheapest prices for over three years, but this cut will take us to a new low, the likes of which we haven’t seen since late 2010, early 2011 when the price of petrol and diesel unfortunately jumped by ten pence a litre in just a few months.”

He added that the reduction was great news for motorists as the drop in wholesale prices is being passed on by what he describes by “responsible retailers” at the pumps. Mr Williams believes the savings made will help ease the cost of motoring for all, while also boosting large and small businesses.

Luke Bosdet, a spokesperson for the AA, said that a five pence cut in the price of petrol will take £2.50 off the overall cost of filling the average fuel tank –
saving that will be welcomed by those trying to make ends meet.

Posted by Emma George