Tesco fuel cut could spark new price war
Tesco is cutting fuel prices by 2p a litre from today across its forecourts — the second reduction at the pumps in less than a week.
The move comes after more than a week of tumbling crude oil prices, reflecting concerns about weakening economic growth around the world.
Northern Ireland’s hard-pressed motorists will welcome the news as they struggle to make ends meet in these straitened recessionary times.
Tesco’s decision to slash prices follows a similar move last week by Asda which cut prices at its local filling stations by a further 2p. Sainsbury's is also expected to react in order to remain competitive, while other fuel retailers cut prices by about 1p days earlier.
Meanwhile, independent petrol station owners have insisted they will struggle to keep pace with supermarket petrol deals.
They claim the pricing gap between their pumps and supermarket forecourts is reaching record levels as the groups push increasingly aggressive loss-leading petrol promotions in order to lure grocery customers.
Supermarket groups represent about one in seven forecourts, but their price promotions ensure they attract a far greater proportion of business from motorists.
Brian Madderson, of RMI Petrol, which represents 6,000 independently owned forecourts, called this level of loss-leading “a new phenomenon”.
Brent crude oil futures dropped from $117 (£72) a barrel at the start of this month to $103 (£63), before recovering to close the week at $108 (£66). Pump prices in the UK should reflect these movements, though they are influenced by other factors including the strength of the pound.