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.