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Supermarkets charging too much for petrol, RAC says – here's how you can cut fuel costs

Motorists are missing out on cheaper petrol because major supermarkets, which are the UK's biggest fuel retailers, aren't lowering their forecourt prices to reflect far lower wholesale costs, according to motoring organisation the RAC.

Supermarket giants Asda, Morrisons, Sainsbury's and Tesco are currently seeing profit margins of around 15p a litre on both petrol and diesel, finds RAC data, with drivers paying average prices of 160.96p a litre for unleaded petrol and 184.41p for diesel at these outlets.

The supermarkets are still cheaper on average compared to other fuel retailers – by 2p a litre for petrol and 3p a litre for diesel – but the RAC says prices could be much lower if the supermarkets reduced their margins. The RAC said its research focused on supermarkets because they "dominate UK fuel retailing" and because "they have traditionally sold petrol and diesel at lower prices" due to the large volumes they sell.

See below, as well as our Cheap petrol and diesel guide, for info on how to cut the cost of driving.

RAC: 'Supermarkets should cut prices by at least 5p a litre immediately'

According to the RAC, if the supermarkets were to take a lower average margin of 10p a litre (instead of 15p) on both fuels, they would be selling a litre of petrol for 152p and diesel for 173p – around 9p less than the current prices for petrol and 11p less for diesel.

RAC fuel spokesman Simon Williams said: "With many people struggling to put fuel in their cars it's very sad to see the biggest fuel retailers taking advantage of their customers by charging far higher prices than they should be. We urge the supermarkets to do the right thing by their customers and cut prices by at least 5p a litre immediately."

How to cut fuel costs

Firstly, don't assume your local supermarket is the cheapest place to fill up – the RAC notes that smaller, independent forecourts can offer more competitive prices. You can sign up to the website for free to see the cheapest filling stations in your area.

You can also consider using a cashback credit card to pay for your fuel. These cards pay you each time you spend on them and can be a great way to save on fuel and other everyday costs – but always make sure you repay the card IN FULL each month to avoid interest charges.

Other top tips to cut petrol costs include the following – our Cheap petrol and diesel guide has the full info: 

  • Make your car more fuel efficient – for example, by taking off roof racks and keeping tyres inflated. 
  • Drive more efficiently to cut fuel use – for example, by accelerating gradually and braking naturally. 
  • Drive less – one option is to share lifts to work with friends, for example. There are a few sites that connect people doing the same journey, such as Liftshare. Alternatively, you could consider using public transport or cycling or walking instead to save money. 

What do the supermarkets say?

In response to the RAC's claims, a spokesperson for Asda said: "Asda is the price leader in the supermarket fuel sector and we remain focussed on providing our customers with the best value at the pumps."

Meanwhile, Andrew Opie, director of food and sustainability at the British Retail Consortium (BRC), a trade association for major UK retailers including Sainsbury's, said: "Retailers understand the cost pressures facing motorists and will do everything they can to continue to offer the best value-for-money across their forecourts, passing on cost reductions as they feed through the supply chain."

The BRC also noted that Government analysis has found that the presence of a supermarket can lower the price of fuel in the surrounding local area.

We asked Morrisons and Tesco to comment and we will update this story if and when they respond.

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