/ Money, Motoring, Shopping

Supermarkets shouldn’t be responsible for cutting fuel costs

Sainsburys petrol station

Morrisons has just become the latest supermarket to offer discounted fuel for customers who spend a certain amount in its stores. Great – but why are supermarkets doing more to drive prices down than government?

The retailer has joined Sainsbury’s and the Co-op in what is being deemed the ‘fuel war’ to offer the cheapest petrol prices ahead of the upcoming bank holidays, when consumer spending will spike dramatically.

Morrisons’s new ‘Fuel Britannia’ deal rewards shoppers who spend more than £40 in one of its stores with 6p off a litre of fuel, cutting average costs from 134p to 128p per litre.

Currently, the Co-op offers 5p off a litre when you spend £30 in store, and Sainsbury’s knocks the same off every litre for those who spend £50 or more with it.

Government efforts look puny

You could argue that this is just an attempt by a UK blue chip company to get its hands on a bigger slice of increased consumer outgoings over the next few weeks. After all, we’ll be spending an extra £260m on food during the Easter, royal wedding and May Day bank holidays.

But actually, I think it’s great news for consumers. Not only that, it shows retailers are doing far more to slash the price of fuel than the government.

This fuel war means we’ll see significant price reductions on forecourts all over the country for the first time in months, following unsuccessful efforts by the government to ease the ever-increasing cost of motoring.

George Osborne’s Budget 2011 promises to reduce fuel costs by cutting fuel duty by 1p and introducing a fair fuel stabiliser have done very little to ease the battering that drivers’ wallets have taken in the last few months.

According to reports, margins on supermarket fuel are already very low, but retailers are still willing to offer handsome savings at the pump as a reward for spending more money with them.

Reap the benefits

As long as supermarkets keep challenging one another to offer the best fuel discounts in return for buying their products, we’ll reap the benefits every time we shop and fill up.

This is great news, but I still want to know why are supermarkets are leading the way. In my mind, far stronger action should be taken by the government to reduce the cost of petrol and diesel, instead of it being left to retailers who are competing for our business.

Comments
Member

A 50 litre tank of fuel costs about £65 normally (and for now). Take 5p per litre off and that’s £2.50 less. But to get that £2.50 off you must buy £50 worth of groceries.
Perhaps another way to look at it is if you bought fuel from the supermarket at full price you can get 5% off your groceries. The sums are the same?
It’s a promotion they’ve been doing this and similar for years. It only becomes emotive because it’s Petrol.
The Governments approach to fuel cost is another issue completely.
Fuel tax at about 65p and VAT at 20% on top resulting in the tax take being well in excess of 50% of what you pay at the pump. This is legalised robbery pure and simple. I don’t know about you but certainly didn’t vote for that.
Yet people still seem to place most blaim for high fuel costs on the oil companies?
Strange world isn’t it?

Member

I agree Chris, but I think it’s a good deal being offered by supermarkets right now because it’s timely. With the influx of bank holidays upon us, most of us are going to be spending more on groceries anyway. So why not combine your larger shop with fuel savings? It’s certainly better than offering nothing at all.

Member
trevor brown says:
21 April 2011

on paper it looks a good deal, but when you compare the shop prices with other supermarkets you are spending more money on the shopping so you are not really saving money. it should be our con-dem government to cut the taxes on all the fuel we buy

Member

Sainsburys did this recently and we took advantage of it, like you say, only 2.50 off but its still 2.50 off something I was going to buy anyway.

The real ploy here though is to ensure that I fill up where I live. Rugby – St Albans, the difference in price per litre is…….

5p!!!

Member

nothing will make me shop in morrisons again though, be it bread/meat/deli/fruit – it’s all way worse than any other supermarket I’ve been to

Member
pete says:
21 April 2011

One thing not mentioned in this article is the Shell ‘Drivers Club’ Loyalty scheme (don’t know whether BP or others do one too). Buy petrol, earn points, get a voucher for a discount. I don’t use my car that often, but my most recent voucher gave me £3.50 off a tank (min 20ltrs) of V-Power – it’s £3.00 off normal unleaded/diesel, with no minimum. A better saving that at Sainsburys or Morrisons for 50ltrs, and the quality of the fuel is better. You will also get vouchers for free coffee etc at their petrol stations, so the savings continue…

Member
Ken (Wigan) says:
21 April 2011

If it wasn`t for supermarket fuel stations, the price of a litre now would be heading towards the £2 mark. Everybody should use the supermaket fuel, then the big oil companies, eg. Esso, Texaco would have to toe the line.

Member
pete says:
21 April 2011

the stuff they sell is not that good as I know a golf gti that gets 50 miles less using super market fuel on a tank, also I work on cars and if they use supermarket fuel they are more likly to need a cat for the mot, they are oute to make money. if the fuel was the same as other sellers it would be worth using but right now I wont use it.

Member
Sue Eske says:
21 April 2011

Think the fuel offers at supermarkets are great – unfortunately only have a Tesco petrol station in
our nearest town – Sainsbury’s 15 miles away – Morrisons 14 miles- a big help as we have two
big cars (do less then 4000 miles in each per annum now – so still very green!) but the Tesco
petrol offers do help. Don’t see why special deals any different to other special offers at
supermarkets.

Member
Brian Ormondroyd says:
21 April 2011

Thes spend £40/£50 supermarket ‘offers’ discriminate against the single person household – the pensioner or single mum or dad.
l have written to my MP about this clear discrimination. l live in hope.
This is an issue, this discrimination, is a matter that Which should take up.
Perhaps the supermarkets should cut their prices for all. The profits are there.

Member
Peter Ratigan says:
21 April 2011

I once checked up on a supermarket fuel saver deal. I looked at the fuel price at a filling station close to the supermarket and found that the price at the filling station was only 1p higher. Two or three weeks after the supermarket promotion had finished the filling station price was still only about 1p higher. Is it possible that the supermarkets are raising their price for the period that these offers are on ?

Member
Colin Tyler says:
21 April 2011

I went to a large Sainsbury’s at Chichester today to take advantage of a 5.00p per litre discount voucher. Their price for City Diesel was 143.9, whereas a small independent locally was charging 139.9. It was not worth the trouble as Sainsbury’s price was clearly not competitive.

Member
Hilary says:
21 April 2011

The cheapest petrol stations on my journey to work are Asda, closely followed by Tesco. The Shell in the nearest city (24 miles away) is a lot cheaper. However, as a single person I would never manage to spend enough to get the vouchers, yet I have to travel a 58 mile round trip to work every day (have to go where the work is!) so I could really use them. There is a Morrisons close by the Tesco too but I wouldn’t go there to shop and the petrol is usually the same price or higher than Tesco. I see no difference between using vouchers for petrol or for shopping; if it’s cheaper I go for it.

Member

Supermarket offers of cheap fuel when you spend a certain amount in store is all well and good, but when you consider THEY control the price at the pumps through their bulk buying forcing local retailers to be realistic in their pricing or go “to the wall”.As a multi-medium sales force, supermarkets, in cahoots with desperate manufacturers can offer in store deals to boost profits hence offering money off per litre. Once I took advantage of a Sainsburys offer of 5p off a litre, the fuel was substandard and it cost a lot of money to get my car running as it should, Sainsburys response was basically HARD LUCK, prove it, we’re bigger than you! Buyer beware! Supermarkets buy fuel from the spot market, fuel “down the hole” which has not been taken up by major suppliers and therefore become “tired” and probably contains water vapour which can affect modern engines.Once bitten I buy from local retailers and am happy to pay 1p a litre more for fuel that does the job as the £2.50ish you may save per tank can cost you, as it did me, £40 per tank to rectify!!

Member
Mal Collis. says:
21 April 2011

The day before the budget, our local ASDA increased their Diesel by 1p per litre. Budget NIGHT they took 1p off! The next day it was on again. It has since risen by 3p, and I expect it will rise before Easter in line with all other local Supermarkets and Petrol Stations. It is now 139.9 per litre.
To think that I was upset when petrol rose to 3s.4d (17p) PER GALLON, (about 4p per litre!), when I started driving in 1960.
So much for the Government’s big gesture! I can think of a few more appropriate gestures they deserve!!!

Member

Forget about fuel prices. Look at driving for what it is – a treat only to be enjoyed for a few generations.

Of my four grandparents, a ride in a motor car was a rare treat for two of them, probably never happened for one, and even seeing a motor car was probably a talking point for one of my grandparents.

But, all the experts know that we are running out of oil. We might not be completely ‘dry’ for very many years yet, but I suspect the cost will become prohibitive in the next decade or so. My grandchildren might well view motor cars the way my grandparents did.

Enjoy it. We’re probably the luckiest generation in history.

Member

agree with the comments, but only worth it if you are going to spend £40. And its not just the single and pensioners. There’s two of us, and I bought everything we needed today, including some Easter gifts, and still didn’t spend anywhere near £40. I shop at Morrisons because it’s cheap. More importantly, rahter than petrol costs coming down since the budget its gone up. The best deal is the collecting points on petrol spend which add up to £5 vouchers.

Member
Rob says:
21 April 2011

I am glad the supermarkets are reducing costs for the motorists. If they can still make a profit fair play to them. In northern Ireland a litre of Diesel costs £1.35 at Tesco’s. A Sainsbury store accross the road has matched that… but prior to Tesco opening near them their price was the same as any other retailer. Cut price fuel…. thank goodness. Better than paying £1.43 per litre for diesel. But why the government can take more than 50% of that on tax is surely ridiculous. How can that be justified. Also why are there so many post code variations in the price of fuel. Living in the country, there is no altrernative but to use the car. I really do not think it pays to work any longer. Better to stay at home and save the planet! less carbon emmissions!

Member
tom says:
22 April 2011

WIll Mr Hull or any of the supermmarkets comment on the suggestions that supermarket fuel is an inferior grade to retial service stations?

Member
david wilson says:
22 April 2011

As our weekly (main) shop is usually in excess of the £40 or £50 limits usually imposed by Supermarket promotions we tend always to take advantage of the offers and for my part I usually run my tank slightly lower than normal and fill up very close to the expiry date of the issued voucher. Additionally one of the best ways to save money in my view is to look out for competitive offers at those Supermarkets close to each other as they tend to use petrol as a “known value item” to lure you into the store. I filled up on 21st April at a local Sainsburys at £1.31 a litre and although this was 3p dearer than a week or so ago it still compares very favourably with the £1.40 being charged by a BP garage close to my home. That’s 9p a litre or almost 41p a gallon saving!

Member
Alison Macleod says:
22 April 2011

If you only buy your fuel from supermarkets, many of the filling stations not attached to supermarkets who are not able to offer this sort of deal will go out of business. With less competition supermarkets will then not be so worried about offering fuel at a competitive price but drivers will have no choice but to buy from them.
I run our community owned filling station as a volunteer. It is automated and sells fuel 24/7. It is in a very remote community in North West Scotland; we are almost two hours drive away from our nearest supermarket. We pay more per litre on delivery than the supermarkets sell fuel at, but we keep our margins as low as we possibly can. Local people and visitors understand how important it is that we keep our filling station and buy their fuel there. I never buy mine anywhere else. Prices today are diesel 1.499, U/L 1.439; that is with a margin of 6 pence added per litre which just covers our costs. If we lose our filling station it is the start of a slippery slope for the community; we will then lose our only grocery shop and PO as people will do their shopping when they leave to get fuel. Our numerous tourists will leave to get fuel and move on elsewhere instead of coming back to spend more time here.
If in Applecross this summer, please fill up at our filling station, we need your support.

Member
Josephine says:
22 April 2011

Some of the tax should be taken off of fuel and put on alcohol and tobacco, as these have a knock on effect to the NHS and the Police services. More hybrid cars would be good so minimising the use of petrol and good for the environment. Another saving could be giving all MP’s a rise of £2,000 a year and stop them claiming any expenses!

We have to use a car as one of us is disabled and it has to be reasonably large to carry the person and equipment. A full tank now costs just under £65, disgusting.

I do make use of coupons off of petrol when Tesco and/or Sainsbury’s are running an offer.

Member
Rob says:
24 April 2011

There are so many reasons for wanting cheaper fuel costs as we all try to balance the cost of general living expenses. I understand the reason behind taxes, but if every government made better use of financial resources to every necessary component of running the country perhap sthe need for high fuel prices would not be needed. Fuel tax is an easy option for raising money. Its about time we in the UK began saying No. we seem to intervene in foreigh affairs much to often. Save money… fire less rockets, drop less bombs. Reduce tax and support the local economy.
I am selling my VW to buy a more economical 60MPG car…… just another economy in life.
As for Applecross……. yep Have been their on the motorbike. Love Scotland… but trying to find Petrol in scotland on a Sunday is a real nightmare!

Member
Les says:
24 April 2011

I spent the required £50 at tesco to get my voucher for deisel. I duly filled up and
used my voucher onl to drive past a nearby filling station to find the advertised price
4p cheaper than tesco,s advertised price. My saving equalled 1p a litre, so much for
supermarket savings. BAH.

Member
Keith says:
25 April 2011

How will life seem when we have not only killed off our local shops ,but we have only supermarket service stations to get our fuel from. Why do we seem determined to let these companies dictate how our future will be. Oh! but the good deals may still be around until the Supermarkets have killed each other off as well.
Really, will we all be saving very much when we have to get the car out for every purchase. I can see everybody having to operate as if they live in the Australian outback to make shopping efficient.

Member
AMDP says:
26 April 2011

Again the price of petrol, where I live – a Scottish Island we have 1 supermarket with no petrol station, is £149.9 Admittedly I am a single person but I would love the chance to have 5p a litre off!
Certainly my main shopping even once a fortnight would be over £40. Diesel of course is about £157.
Surely something should be done about this.!

Member
Fred says:
26 April 2011

Tesco Express is our only local supermarket filling station, and it seems they are not prepared to offer any deals. Whenever our other local garage increases it’s price, Tesco do the same, and only give you half the points on your card that they would give you on your grocery shopping, so it’s hardly worth making a detour to fill up there. Why can’t they sell all their fuel at the same price up and down the country, surely they buy it at the same price. They are 5p per litre more expensive than supermarkets 20 miles away.

Member
Frank Ashley says:
28 April 2011

A few years ago, supermarket fuel was always 2-5p/litre cheaper than local filling stations, although then as now the price varied, sometimes by several p/litre, from town to town with no logical reason other than that is what they could demand. Now that many local filling stations have gone to the wall, frequently there is little or no difference in price; in fact recently in Stratford on Avon the local Shell station was 1p/litre cheaper than Tesco. “Every little helps” said the sign by its filling station, but in this case the help was to Tesco.

On a slightly different tack, why is diesel once again significantly more expensive than petrol? In Europe it is much cheaper.

Member
Willie Coupe says:
8 May 2011

Increased fuel costs actually help smaller local shops v. the supermarkets as people are more likely to use them rather than travel to the supermarket. This also means less fuel is burnt, making my air slightly cleaner and more healthy. A third benefit is that less driving or slower more economical driving means less likelihood of people being killed on the roads.