Supermarkets hold back on fuel price hikeAA says rises could have been a lot worse

16 March 2007

Supermarkets may well have 'held back' from big hikes in fuel prices to restore confidence following the petrol contamination crisis, it was revealed today.

Supermarket fuel prices have risen in the last few weeks, but not by as much as at non-supermarket outlets, a fuel price report from the AA showed.

The AA said the rises could have been a lot worse, given increasing world oil prices and petrol shortages in the USA.

Supermarkets may have 'softened the financial blow' after the cases of contamination which damaged thousands of cars, the AA added.

Cheapest in the south east

And its figures showed the cheapest petrol is now to be found in London and the south east of England - the areas worst hit by contaminated fuel.

The fuel price report showed that supermarkets are now charging 87.2p per litre for petrol - on average 2.3p a litre less than the 89.5p figure for the market as a whole.

The AA said the difference between supermarket and non-supermarket prices was now double that of last month when the gap was only 1.2p a litre.

Supermarkets affected by contaminated fuel raised average petrol prices by up to 1.8p a litre between mid-February and mid-March, while increases at non-supermarket outlets were at least 2.1p.

Sainsbury's, which was not affected by the contamination, recorded an increase of less than 1p a litre.

At 89.5p a litre, the average price of petrol in the UK is 2.6p higher than in mid-February. Diesel has risen 1.8p a litre to 92.7p a litre.

Fuel contamination scare

The average price of a litre of petrol in London and in south east England is now 89.2p a litre.

AA public affairs head Paul Watters said: 'Although the average petrol price rise adds another £1.30 to the cost of refilling a typical 50-litre fuel tank compared to a month ago, the rise could have been worse.

'The difference between the cheapest and most expensive retailers has grown from 2.82p a litre last month to 5.09p in March, with the supermarkets raising prices by a lower margin than the rest and softening the impact of inflationary pressures.

'Perhaps the best indication of this comes with northern regions losing their long-held position as the cheapest places to buy petrol in the UK. This now goes to London and the South East - the areas worst affected by the fuel contamination scare.'

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