Asda, Tesco and Sainsbury's have joined Morrisons in cutting petrol prices by 2p, but campaign groups have accused the supermarkets of being slow to pass on lower wholesale prices to customers.
Asda announced a price cap of 105.7p a litre for unleaded and 106.7p a litre for diesel across its 272 stations.
Last week, Morrisons kicked off the price cut by reducing the price of unleaded by 2p a litre, also cutting up to 1p a litre off diesel. Tesco also announced a 2p cut.
Sainsbury's will reduce pump prices for diesel and unleaded by 2p a litre across its 303 forecourts from Tuesday.
Spokespeople for all of the big four were quick to praise the reductions, but the RAC pointed out that the price retailers pay for fuel have been falling for almost a month while pump prices remained largely static.
Oil dropped to $43 a barrel recently, its lowest level since early May, and has lost 10 per cent since the Brexit vote on 23 June. Retailers’ margins on fuel have increased by 50 per cent since then, according to Howard Cox, founder of campaigning group, Fair Fuel UK.
The wholesale price of petrol is £1 a litre for petrol, with diesel at 99p. Cox said that should translate into £1.04 and £1.05 respectively at the pumps.
The reductions open up further space between the retail giants and fuel specialist including Shell, BP and Esso. Prices at the big four supermarkets are several pence lower than the nationwide average which stood at 111.7p a litre for petrol and 112.4p for diesel on 1 August, according to RAC figures.
Cox called on other companies to drop their prices in line with supermarkets. A 6p drop in fuel prices would put up to £100m back into consumers pockets, he said.
RAC spokesman Simon Williams praised the current price drop, but said it was a shame it did not come sooner. “This price cut takes us back to a supermarket price that was last seen in early May. Hopefully other supermarkets will follow suit which will drive prices down across the country,” he said. “If that happens we should see the average price of both petrol and diesel drop from around 112p a litre to 110p.”
Luke Bosdet from the AA added: “Drivers are in a good place with pump prices this summer, paying as much as 5p a litre less than a year ago. However, with the weaker pound, it’s more a case of pump paradise-lost than pump paradise-found.” He that said had the pound regained last summer’s value against the dollar, summer petrol prices in the UK would have been at a seven-year low.
Additional reporting by PA
