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Your Money > Household Bills Articles > Paying too much...
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By Richard Evans
If you can't find any cheap petrol in your area, you may have to blame Asda. The supermarket chain's policy of undercutting rivals by selling fuel at the same price across the country means that Britain is divided in two as far as the cost of filling up is concerned. In areas where Asda has a filling station, competition means all petrol stations sell cheaply, but in places without one its rivals can get away with charging more. "Asda has a national price policy for petrol and diesel - and those prices are usually good," says Luke Bosdet of the AA, which yesterday expressed serious concerns that petrol companies and retailers are not passing on benefits from decreases in oil prices of over a quarter in the past two months to consumers. Those who live near an Asda filling station don't have to actually go there to benefit from lower prices, however. Its local competitors, including the other supermarkets, will normally match its prices for petrol and diesel - or even undercut them. But if there is no Asda nearby, they will probably be able to charge more. If, for example, you live in Reading, a town with an Asda filling station, supermarkets in the area were charging 109.9 pence per litre when the AA checked recently. But in the nearby towns of Windsor, Wokingham, Maidenhead, Bracknell, Basingstoke, Newbury and Andover - all of which lack an Asda filling station - the cheapest prices on the same day were at least 111.9 pence per litre: a difference of 2p per litre. The AA's most recent monthly survey found that Asda's price of 109.66p for petrol compared favourably with the national average of 113.15p. "We give all our customers the same fuel price whether you're in Elgin or Eastbourne," says James Maxton of Asda. "There are a few exceptions where the price may be lower to match local competition. This is rare as we are generally the cheapest anyway. We never charge more than our national price." This price is currently 109.p for unleaded petrol and 121.9p for diesel. "Our rivals refuse to set a national price. This allows them to charge higher prices where there is less competition," he adds. "Customers face higher prices where there isn't an Asda driving prices down." Paying too much for petrol? Have your say But some in the industry say that Asda can afford to be aggressive only because it has relatively few filling stations. A spokesman for Tesco explains: "Like many other retailers, Tesco does not operate with one national price. We endeavour to be competitive on petrol and diesel in the local catchment area for each store. With the added benefit of Clubcard points and our current promotion - offering 5p off per litre when you spend £50 in store - Tesco is working hard to help our customers cut their fuel bills." Alongside complaints about price differentials between neighbouring towns, the AA says it is also hearing from drivers angry that recent sharp falls in the price of crude oil do not seem to be passed on in full to the motorist. "We reckon that fuel prices are about 2p per litre higher than they should be, given the moves in the crude oil market," says Bosdet. This equates to about an extra £1 each time you fill up. But hopes that petrol and diesel would fall sharply have been dashed by the fact that the weakness of the oil price is partly driven by the strength of the US dollar. As the American currency has strengthened, the pound has fallen - and as oil is priced in dollars, the price of oil in sterling terms has been far more stable. Finally, with the government taking over 50p in duty for every litre of petrol sold, changes in prices at the pump are likely to remain slight. Useful links: |
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