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Drivers punished uncompetitive supermarket pump prices

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Petrol prices at their lowest for nearly three years failed to revitalise UK pump sales during the last quarter of 2013, AA analysis of new government figures reveals.

Overall, petrol demand in 2013 fell by more than 850 million litres, equivalent to 19 days consumption.

Demand for petrol from October to December fell 4.2 per cent compared to the same period in 2012. The big four supermarkets were hit hardest with a 4.9 per cent reduction while other retailers saw sales fall 3.6 per cent.

Sales of diesel at Tesco, Sainsbury’s, Morrison’s and Asda fared better than on non-supermarket forecourts, with a 2.8 per cent boost in the final quarter of last year as opposed to a 1.5 per cent increase at non-supermarket fuel stations. Overall, UK diesel demand from October to December rose 2.0 per cent, helped by a 2.0 per cent rise in commercial sales.

A 4.3 per cent boost to supermarket sales of diesel contributed most to an overall 1.8 per cent increase in UK diesel sales in 2013 compared to the year before. This added more than 450 million litres to demand or the equivalent of an extra week’s consumption.

“From September to November, the pump price of petrol fell from a late summer peak 138.38p a litre to a low of 130.13p, before hovering around the 131p level for the rest of the year. In 2012, petrol sales recovered when prices fell – but not in 2013,” says Edmund King, the AA’s president.

“We think that, having learnt to use car travel and fuel consumption as a budgetary lever, UK families reacted accordingly when faced with the threat of a 10 per cent rise in domestic energy costs. In December, when we gauged how 17,629 AA members would respond to a power cost surge, 35 per cent said that cutting back on car use was their way to balance spending.

“Although supermarkets have been charging more consistently for fuel, with the price gap between rural towns much less, their share of petrol sales has fallen more than for other retailers. Price-matching and reward point schemes that offer pretty much the same may have made it harder for consumers to distinguish between the two types of retailer. However, Tesco’s new reward card fuel offer may indicate a fight back that other supermarkets will follow. More competitive diesel prices, though, seem to be working better for supermarkets.”

 

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