Last month the Office of Fair trading published a controversial report which claimed that the price for petrol in the UK is fair, and that the reason why it is so expensive is because of fuel duty, and not oil companies charging unfair amounts for the product. The cost of running a vehicle is becoming a huge talking point in the UK right now, especially as next week George Osbourne will reveal his intentions for fuel tax in his annual budget report.
In order to run a car, owners now have to find the money not only to buy a vehicle, but also tax, MOTs and petrol, meaning that many often look for cheap car insurance quotes to help lower the overall costs. However, even with a cheap car insurance policy it has been revealed recently that some of the poorest families in the UK are now having to spend twenty-five per cent of their income just on running their vehicle, most of which is on petrol. This is why it is good news that supermarkets are now cutting the amount of petrol for customers, in what is being called a ‘price war’.
Sainsbury’s sparked the price war by announcing that they were reducing the cost of petrol by 4p per litre and diesel by 3p per litre, which has led other supermarket giants following suit. For example, Asda has reduced their petrol prices by 3p a litre and diesel by 2p, and Tesco has announced that 496 of its forecourts will now offer petrol 3p per litre cheaper. The AA are pleased with the move from supermarkets, with AA head of public affairs Paul Watters saying “This is a substantial fall, worth £2 a tank of petrol, and fairly reflects the drop in wholesale costs which started in late February.”
“However, many non-supermarket fuel stations started undercutting supermarket prices a fortnight ago. Drivers will very much welcome Sainsbury’s move which gives respite after the third 8p-or-more pump price surge in the past 12 months. The response from other supermarkets, hopefully passing on the full drop in wholesale costs and not just where they feel they need to, will dictate the extent of this potential boost to family budgets.” Drivers should be wary however, as it has been rumoured that Mr Osbourne will not back down on his 3p fuel tax rise in his budget announcement next week, which will increase the cost of petrol from this September.