Asda is now the UK’s most expensive fuel retailer, a survey shows, after the retailer’s private owners ditched their long-standing commitment to be the cheapest on the market.
The retailer, which was bought by the billionaire Issa brothers and their private equity partner TDR Capital in 2021, charged an average of 2.1 pa liter more for unleaded petrol than rivals Tesco, Sainsbury’s and Morrisons at the end of May, according to analysis by the bank. Motoring Organization RAC.
The difference in average diesel prices was even steeper, at 2.5pa a litre, according to a study using data collected by the Competition and Markets Authority (CMA), which closely monitors fuel prices to ensure motorists are not being ripped off.
The Issa brothers made a fortune in the petrol yards. After acquiring Asda, they folded part of their forecourt business, EG Group, into a supermarket chain. At the time of the May 2023 transaction, Mohsin Issa said it would allow it to offer “highly competitive Asda fuel” to more customers.
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The RAC said that for many years Asda “boasted on selling the cheapest fuel”, often being the first supermarket to cut pump prices.
RAC head of policy Rod Dennis said: “Asda no longer holds the crown for selling the cheapest fuel despite a promise made when it merged a year ago.
“The remaining big three supermarkets, as well as some enterprising independents, are now offering lower prices.”
Asda said it was still the cheapest fuel seller in its large supermarkets, but admitted it charged higher prices in its convenience stores, where the market was different.
It said that if these smaller outlets were excluded, Asda offered unleaded fuel at an average price of 145.12p compared to the next cheapest supermarket, which it said was Morrisons at 145.17p, while Tesco supermarkets sold fuel at an average of 145. 52 pence.
An Asda spokesman said: “We continue to focus on providing our customers with the best value at the pumps as we grow in the convenience sector. In May, we reduced the price of unleaded and diesel by a combined average of 2.31 pence per litre.”
The CMA, which last month was given powers to monitor the fuel market and report unfair practices to the government, published a report in July last year saying Asda’s target fuel margin – the difference between what it paid for fuel and the price at the pump – was three. in 2023 several times higher than in 2019.
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In January, TDR Capital chief executive Gary Lindsay told the House of Commons trade and business committee that Asda had “no particular strategy to raise the price of fuel or make more profit on fuel”.
The RAC analysis found that across all UK yards, the price of petrol fell by an average of 2.4pa a liter to 147.9p last month. Diesel prices fell by 4.5pa a liter to 153.6pa.
Dennis said pump prices should fall much faster to reflect the drop in wholesale costs.
He said: “Unfortunately, when it comes to the much-needed reduction in pump prices, it’s a case of too little too much haste, with the majority of drivers still getting a crappy deal every time they fill up. We are once again in classic “rocket and feather” territory, where pump prices only drop when they really should drop like a rock.”