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The Guardian - UK
The Guardian - UK
Business
Tom Ambrose

Rural areas being hit hardest at pumps as fuel prices rise again, says AA

A person beside his car at a Morrison's petrol station
Supermarkets such as Asda, Tesco, Morrisons and Sainsbury’s have been accused of overcharging rural customers. Photograph: John Keeble/Getty Images

Supermarkets have been accused of overcharging customers in rural areas for fuel, as petrol prices on forecourts in the UK hit their highest level for six months.

The cost of petrol reached 149.13p a litre on Sunday, the dearest since early February, while diesel broke 150p a litre for the first time since May, at 150.61p, as increases in oil prices caused by global production cuts fed through to pricing at the pump, the motoring group AA said.

The price rises will crimp spending for holidaymakers travelling on Britain’s roads and already under pressure from the cost of living crisis, it added.

Separately,the AA said drivers in rural areas were paying, on average, between 10p and 15p a litre more for supermarket petrol despite scrutiny from MPs and the competition watchdog.

The motoring group said many drivers in rural areas were paying about 145p a litre, compared with 135p or less in bigger towns and cities, at supermarket pumps. Even in towns and cities there was a difference of up to 6p a litre between neighbouring areas, it said.

The energy secretary, Grant Shapps, last month rowed back on plans for a law to force supermarkets to make fuel prices more transparent, instead backing a voluntary comparison scheme in a meeting with bosses from the big retailers.

The executives he met from Asda, Tesco, Morrisons and Sainsbury’s – as well as from the fuel providers BP, Shell and Esso – were under pressure to explain why they had failed to fully pass on savings to customers after a drop in their wholesale fuel costs.

The Competition and Markets Authority said in July that prices had risen since 2019 because of “a decision by the traditional price leaders to compete less hard”.

Luke Bosdet, the AA’s spokesperson on pump prices, said: “Despite the government and CMA taking the supermarkets to task for over-charging drivers for fuel, this past weekend still showed major differences in supermarket pump prices around the country.

“Bad habits are proving hard to shake off among the UK’s fuel retailers and that is not solely the fault of the supermarkets.”

He added: “Over the decades, a supermarket policy of shaving a penny or two off what other local fuel stations charge has stunted competition within those higher-priced communities; oil company-branded forecourts could have undercut those expensive supermarkets but they were happy to play along.”

Over the past month, supermarkets have brought prices down by just half a penny when compared with company-branded retailers – but the cost of diesel has gone up by a similar amount.

This month, Asda began publishing fuel prices at its forecourts online, becoming the first retailer to launch such a service after questions about widened profit margins at the pump.

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