Petrol price-wars at the pumps
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It's been three months since petrol prices hit their peak, with the average price of a litre of unleaded topping £1.19 this July. On average we're now paying just over 97 pence per litre. While this isn't exactly a bargain, at least prices are heading in the right direction.
But with petrol companies announcing record profits in recent weeks, are some garages still charging too much? Our Prime Minister seems to think so. He recently urged filling stations to reflect the falling costs of oil in their pump prices.
Watchdog visited petrol stations around the UK to see what people thought about the cost of filling up. We found that people still feel they're paying far too much to fill up their tanks. A number of you were outraged at the huge profits announced by some of the petrol companies. One woman told us: "They don't care about us, they just care about profits."
The average petrol price is falling by about a penny every five days. This is partly because of cheaper oil, but also because of a price war led by the supermarkets. Unfortunately, not all of us are paying less at the pumps. The price we pay depends on what the competition is like locally. Often this means you'll pay more in your area if there's no supermarket nearby selling petrol. The price even varies between garages belonging to the same company.
Competitive areas
We asked all the main petrol companies the difference between their cheapest and most expensive prices for unleaded. The biggest variation in prices belonged to BP and Texaco - both companies have a 10p difference between their cheapest and most expensive filling stations. This means, depending where you live, you could end up spending over £5 more to fill up your tank than someone living in a more competitive area, despite both going to the same company. This can add up to hundreds of pounds over a year.
At present only Asda claims to charge the same across the country. RAC motoring strategist Adrian Tink told us he thinks it's outrageous that the larger operators such as BP and Shell can't operate national pricing schemes. He said: "If the supermarkets can do it, I don't think there's much of an argument why they can't do it."
Company responses
We asked all the major petrol companies to comments on the issues raised in tonight's programme (3 November 2008):
Sainsbury's told us it reviews its prices daily and aims to give its customers the best possible value for money for its fuel. It claims that it prices its fuel locally to ensure customers are always paying a competitive price for their fuel, wherever they live. Sainsbury's also points out that it offers further discounts on fuel price via Nectar points and in-store promotions.
Jet told us that its filling stations are run by independent business owners who set their own pump prices. It says that there are a number of factors that drive how prices are set, such as competition, cost of product, transportation costs and the scale of the business. It told us that it isn't privy to every owner's particular business model and so cannot address questions regarding individual site pricing.
BP informed us that its sites are priced by location due to each filling station's varying costs and that it aims to offer competitive prices at all locations. It pointed out that most of its sites are run by independent dealers who are free to set their own prices and these will be determined by a number of different variables.
Texaco stated that its forecourts are independently owned, and the prices it charges will vary as each filling station will have different costs. The company told us that it no longer owns any service stations in the UK and it's the individual site owners who determine the fuel price for their customers.
Tesco told us that it is working harder than ever to keep prices at the pump down and that a local pricing policy is a factor of the market for all genuine national retailers. It pointed out that it operates over 400 petrol stations and that those claiming to operate national pricing policies operate only a limited number of forecourts.
Total informed us that its policy is to ensure that its company-owned sites are competitively priced in their local trading area and the final price depends on a number of different factors. It says that, where conditions allow, it will always seek to pass on cost reductions to its customers.
Shell claimed that it offers, on average, the cheapest fuel in the UK compared to all its major oil competitors and that it competes toe to toe with the supermarkets. It told us that it recognises customers are concerned by the cost of fuel and that it is committed to maintaining competitive prices across its sites.
Esso informed us that it prices its fuel on a site-by-site basis and told us that it has no control over the prices in its independently controlled sites. The company told us that the price charged depends on a number of different factors and pointed out that there's no strict correlation between the price of oil and pump prices. It said that it reviews its prices daily and clearly displays them on pole signs.
Morrisons told us that it always aims to remain competitive and bring the lowest price to as many motorists in as many communities as possible. It says they have consistently led the market in cutting fuel prices with their customers being the first to benefit from lower prices. It claims that a local pricing policy allows them to provide lower prices to a greater number of customers and as a consequence it believes it has more forecourts at 94.9p per litre than any other retailer. It also pointed out that customers can earn vouchers in its stores to further reduce the cost of their fuel.
Asda informed us that it constantly monitors its costs and move quickly to pass on any cost savings to its customers. It told us that it's the first to move its price down and set the benchmark for others to follow. Asda told us that whenever it drops its prices it drops them at every single pump to at least its national price. It said it doesn't hide behind averages and simply have a national price so that its customers know what they will pay no matter where they live.
The United Kingdom Petrol Industry Association (UKPIA) told us that fuel retailing in the UK is a highly competitive business consistently delivering the lowest pre-tax pump prices in major EU countries. The company told us that there are numerous elements influencing pump prices and pointed out that tax accounts for nearly two-thirds of the pump price. It told us that due to factors such as location, total throughput and the
commercial objectives of a station, owner's pump prices will vary from site to site.
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Our local TESCOS is giving you 5pence off your petrol when you spend £50 on shopping. That brings the petrol down to 89.9
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Hi,
I use a website called: http://www.petrolprices.com
All you have to do is enter your post code and then everyday/week you get an email straight to your inbox showing you where the cheapest fuel is at all your local petrol stations!!
An amazing idea!
Paul.
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For the latest petrol prices, regularly updated visit petrolprices.com for prices in your area. A very good service has saved me pounds
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Currently in the Isle of Lewis we are paying £1.12.9p per litre unleaded.The garages are not making a profit but the fuel suppliers are as they predetermine what the garages are going to pay for months in advance as the garages bulk buy fuel.It does not cost any more to deliver to the islands yet we are always being expected to pay more.The office of fair trading refuse to investigate this
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It's very easy to whine about the big bad oil companies, and how they're the baddies, but your own website makes it clear that most of them don't have any influence on any of the prices at any of the pumps. I work in a filling station selling Texaco petrol, so I know for a fact that Texaco owns no filling stations in the UK. It has absolutely no influence over the price at the pump. Petrol is a free market - like it or lump it, we don't have any Stalinist control or 5 year plans governing that market in this country.
And yet your program this evening deliberately distorts the facts by implying that Texaco (among others) are to blame for the price of petrol at the pumps. If I actually worked for them, I'd probably be calling in the libel lawyers about now - it was a disgraceful and unworthy distortion of the facts, and as classic a bit of band-wagon-jumping as I've seen in a long time.
Whay do I care? I don't even work for them, nor do I feel any particular loyalty to them (I don't buy their petrol - it's cheaper at Tescos.) But I'm getting thoroughly sick and tired of this relentless distortion of the facts. If your researchers were merely incompetent, then I assume your website would not admit that Texaco own NO retail sites in the UK - I have to assume the distortion is wilful.
You want to know why petrol is overpriced? It's because the vast majority of it (and the percentage keeps rising!) is tax. Blame Gordon Brown, not the oil companies - they may make good profits, but they don't make them from retailing (or even wholesaling) in the UK.
Shame on you BBC, for such a lazy, band-wagon-jumping bit of populist hysteria-mongering. This tripe is not what we pay our licence fees for.
Surprise surprise - premoderated forum (with a stack of posts awaiting moderation, and not a single visible post.) I guess the censors will probably deem this to be offensive in some way, and silently have it bundled away in the night.
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You can find out the cheapest prices in your area by using a free service http://www.petrolprices.com/
I have founhd them very reliable and they will send you e-mails updating the information regularly.
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I appreciate that you have concentrated on petrol, but many of us use diesel. Diesel is actually cheaper to produce than petrol, but for some reason (profit?) the fuel companies have kept its price much higher than petrol, and have not yet reduced the price in line with the falling price of oil. Is this just another example of the companies greed?
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This comment was removed because the moderators found it broke the House Rules.
I know this thought doesn't lower the price, but why do petrol prices always end in 'point 9'? When the price goes up or down it always goes up by an exact number of pence (94.9 to 95.9 for example). I assume there's a good reason?? The only one I can think of is that the retailers want to con us that it's cheaper than it really is - a bit pointless when the prices are so high. T just find it annoying.
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I have seen today on one of the compersion sites that in guildford area it is down to 91.9p. The most I have seen is 102.9 and about 500 yards down the road it is 94.9p. how mad can that be.
Yours
Robert
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89.9 pence would be a dream come to the western isles of scotland where you still pay £1.16 for petrol and £1.25 for diesel we are really getting ripped off
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It's okay bringing down the price of petrol, but what about diesel? There used to be 2p between petrol and diesel, now there's about 10p, when's this gap going to go back to how was, or even better when's diesel going to be cheeper, it is a by-product of petrol after-all. The UK is the only place where its more expensive...
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I don't think I have ever seen a more pointless article on Watchdog.
We all choose which forecourt to use. I have no sympathy for anyone who believes all forecourts should charge the same. Tescos and Sainsburys charge significantly more for most things in their smaller stores - overheads are higher. They have a duty to their shareholders to maximise profits - so we have no right to complain when that is what they do. Those are the rules of the game they are in.
You should be complaining about the inflexibility of gas and electric meters that are used (or not) to create 1/4ly bills. We cannot be expected to change those suppliers whenever there is a price increase!
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This comment was removed because the moderators found it broke the House Rules.
I live in the Western Isles and I am currently paying £1.21 per litre for unleaded fuel. BP are the supplier to my local shop and as it's the only fuel retailer on the island, I have no choice but to pay the tariff set by the retailer.
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Here in Burgess Hill Tesco has never been more than a penny cheaper than the independants, why!!
After all they can be up to eight pence cheaper just a few miles down the road.
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you should try living on Isle of Man - its at 104.99 at mo and thats good!! at its peak it was 126.99 - we get penalised for living on an island!!
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Tesco may be offering 5p off per litre, but this only applys if you spend more than £50 and is only for a limited time.
If they can sell petrol at 94.9p per litre in Coventry why not in Rugby its only 12miles away?
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I have a Tesco (Upper Boat) and a Texaco station within a mile of my home and both charge 4 to 5p a litre more than garages in Cardiff. To make matters worse within 5 miles on the same stretch of road (A470) in two different directions there are two Tesco stores charging the same price as Cardiff stores one is an express but the other has an Asda nearby and is competing with them.
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I would like to know how much per litre unleaded petrol and diesel were the last time that oil was the current price per barrel. Even taking into account inflation/any new taxes I bet we were not paying anywhere near what we are now.
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Before the last price hike i noticed that petrol was about 90pence per litre and diesel was about 95/6pence per litre, a difference of 5/6 pence.
Now for some inexplicable reason the difference is around 10/12pence between the two and all from the same barrel of crude. Very strange or could it be just a coincidence that the majority of cars are now diesel powered? Has anyone else noticed this???
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Apart from the fact that diesel is so much more expensive than petrol in the UK, why is it that this is the only country in Europe where diesel is more expensive than petrol?
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I noticed a couple of other references to the price of diesel. I bought my first diesel car well over 10 years ago when deisel was considerably cheaper than petrol. This was because of better fuel consumption, better reliability and of course better fuel price. Now we all know that deisel is cheaper to produce, I think it is a by product of petrol, so why has the government penalised us so heavily? I realise that the standard reply is that of supply and demand, but I would think the proportion of petrol - deisel cars is now very similar. Surely this should, at the very least mean that fuel prices are also similar, totally ignoring the fact that diesel is cheaper to produce. I feel very strongly about this a would like to think others of the same ilk will also air their opinions. It is blatant robbery by H M Customs & Excise, and the practice should be reviewed.
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Could the Watchdog team ask the the fuel companies why deisel is so much more expensive then petrol? As someone has already pointed out it is a bi-product of petrol therefore should if anything be cheaper
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To the people who moderate this blogg - If I can't make a comment about the pricing policy of Tescos then this is a total waste of time. I won't bother again, thanks very much.
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Successive governments, from the time of Mrs Thatcher have steadily turned the screw on diesel users. Once upon a time, diesel was a little cheaper than petrol. Then, as more of us got diesel cars, they pushed up the price by taxation. It was claimed that it was because of particulates contamination but engineering improved and exhausts have become cleaner. The diesel has always been far lower on CO2 than petrol engines but company car users of diesel had to pay a 3% surcharge for the privilege. Diesel is a by-product of petrol so a higher price makes no sense. Mr Brown can state all the puff he likes, but few of us will believe a word on the subject of petrol/diesel prices. Furthermore, having taxed fuel to extortionate levels, he has the audacity to plonk VAT on top of that!
The unreal cost of vehicle fuel is tax. I could try going to an LPG car but I'm sure that once it becomes popular and easily available, then the tax will rocket.
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The chance to query the inflated price of diesel was missed by your programme. In fact, from your report it seems diesel users don't exist. Articles that I have read suggest that supply of diesel cannot meet demand and this situation will continue until new production plant has been commissioned.In the meantime users will have to bear the extra 14p per litre or whatever the oil companies care to charge. When will production facilities improve? What incentives do these companies have to invest capital and increase diesel production when they can apparently charge what they like?
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You did a disservice to Diesel users with the throwaway comment at the end of the program. Before the recent fuel price surge, diesel prices were typically 4p/litre, or less, more than unleaded. Now they are generally 10-14p/litre more. this is around 10% on the pump price, but probably over 20% on the price before tax. Watchdog should investigate this as well as the price of unleaded. Is it because many diesel users are business drivers reimbursed by their companies and therefore a soft target? This price differential is a significant cost to business as well as us private users.
In the meantime I would repeat the previous recommendation to use www.petrolprices.com to find your cheapest local diesel and go there, making competition work.
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My local tesco is on average 4p a litre more than anyone else, includign a Tesco 12 mile away, there reason - the Navy base up the road; it brings in money, and if you live near it you have to apy extra for fuel even though the majority of locals are on minimum wage. Tesco just looks for quick profit, it does not care about the customers!
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One thing I have noticed today and yesterday, is that the price of petrol around guildford has slightly gone up to 94.9 a rise of 3p per litre.
I did have a look at hull area on tuesday and the cheapest there was wait for it 89.9p but now it has gone upto 94.9 so that is a rise of 6p.
What is going on with the price of oil falling surly the price of petrol and diesel should be coming down.
[Personal details removed by Moderator]
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We all know that petrol companies are ripping us off. Why can they still charge .9 of a pence per litre? When you add up all the millions of .9 pence's they make an awful lot of money.All prices should be in round figures, and not in decimal points that do not exist in our currency. In my travels I've not seen .9 of a Euro or other currencies. So why can they get away with it here. When was the last time you bought a litre of fuel for 99.9 and had change.
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Diesel is not cheaper to manufacture than petrol and neither is it a by product of petrol. They are both produced from crude oil but then go through various further stages to end up with a product of the required standard and quality. To comply with tighter environmental standards, amongst other changes, both petrol and diesel now have 'zero sulphur' content. This requires in the case of diesel, further processing stages which also use extra energy. Global demand for diesel is growing. The UK has become a small net importer of diesel while the EU as a whole is importing some 27 million tonnes a year, much of it from Russia. We are competing for that supply like everyone else which is why the wholesale price of diesel in Europe has opened up a gap of over 150 dollars per tonne over petrol. Aside from Switzerland, the UK is the only European country to tax diesel at the same rate as petrol.
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Hi,
The real reason the price of Supermarket fuel is cheaper, is because they do not put all the additives in. So if you keep your car for years - DO NOT USE SUPERMARKET FUEL! Engine wear is high and you will get LESS, yes LESS miles to the tank.
I have been told this from an BP employee.
Thanks
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I think you were very irresponsible telling people to boycott garages charging more than 94.5 pence per litre!!! My husband has a small independent garage and he PAYS 93.6 pence. How is he supposed to pay anyone a wage from that?
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Last Monday, I filled my car up at a BP Fuel Station on the road to Wetherby form Harrogate, as I was returning home to West Sussex. I paid 93.9 pence per litre there, but was amazed that locally in West Sussex yesterday, Saturday, I had to pay 95.9 pence per litre at a Supermarket. A few years ago we were told that we have to pay more in West Sussex, than Southampton as we are further away from the refinery, I am wondering where the refinery is that is near to Harrogate that it is able to have such low a price. Mind you even eating out was far far cheaper there than down here.
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The comment i would like to make is that when crude oil prices were increasing the oil companies were quick to increase prices. But why are pump prices higher than what they were before the crude oil price increased but now the crude oil price is the lowest its been for about 2 years. Why aren't pump prices the same as what they were 2 years ago the tax hasn't increased, its just pure profiteering on behalf of the oil companies
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A few points, all to do with greed!
1. Why is Diesel more expensive than petrol. Greed. Are you seriously telling me the refiners "didnt spot" the growth in demand comming. How about the huge volumes of diesel consumed by lorries. There is no reason that the price remains higher other than they can maintain the price higher.
2. Why do prices of fuel vary across the country - Greed. All the supermarkets negotiate their purchases at a national level and have MASSIVE Buying power. If they can sell at 92P in one place and make a profit sure as heck they are making more profit when they sell at 99P somewhere else.
3. HOW MANY BILLION POUNDS PROFIT DO THE OIL COMPANIES MAKE!!???
GREED!!!
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I have been intrigued of late why the differential between Unleaded and Diesel at a number of Tesco and Sainsbury Garages has stretched from 11p to 13p. The vehicle I has low emissions, but that fact seems to be ignored as the prices remain significantly higher now than some years ago?
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Been to the USA twice in last 4 months in August 08 price of a gallon of petrol was $4.2 returned last week
price had dropped to $2.40
some 40% where as here we were up at 1.20 per liter in the summer & now we are at 0.94 not even a 25% drop
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WHY DO CERTIAN PARTS OF THE UK GET CHEAPER FUEL COSTS?? THE PRICE @ THE PUMPS SHOULD BE THE SAME!!
THE COST OF CRUDE HAS GONE DOWN, YET THE COST IS STILL WELL ABOVE £1. PETROL & DIESEL SHOULD BE WELL BELOW THE £1 MARK.
WHY DOES IT TAKE SO LONG FOR THE PRICE TO FALL?? YET AS SOON AS THINGS HAPPEN PRICES SOAR RAPIDLY.
WHY IS THERE SUCH A BIG DIFFERENCE IN PRICE? MANY YEARS AGO THE COSTS WERE LINKED. IN SOME CASES DIESEL WAS CHEAPER THAN UNLEADED.
HOW CAN FUEL COMPANY'S BE GETTIN AWAY WITH MAKING SUCH BIG PROFITS??
I THINK IT'S TIME FOR CHANGE. THE UK IS HAS BEEN RIPPED OFF FOR TOO LONG NOW.
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I don't believe what is being said about diesel prices. This time last year I could buy diesel at 97.9p. That was when unleaded was the same price. I can't see that demand has put in a 15p a litre price differential in just 12 months. As an example :- over the last 3 or 4 weeks my local Morrisons has gradually cut the price of unleaded from 95.9p to 91.9p. In the few weeks before that unleaded and diesel prices fell in tandem 1p a litre at a time. Since then diesel has remained rock solid at 1.06p a litre. Oddly all the 'competitors' have followed the same track.
Now either there is some kind of cartel in operation or diesel prices are being used to subsidse cuts in unleaded prices. We need some honesty from retailers and or a cut in the price of diesel.
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Let the energy companies give us a breakdown on the profit that they are making on Petrol and Diesel.And I bet you that they are making massive profits on Diesel compared with petrol.The companies are operating, Drivers are getting more to the gallon and saving money,I WANT A SHARE.
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why bother moaning just don't fill up at expensive forecourts, simple as, for example on one road in welling there is a texaco with 98.9p a litre and if you travel like 500 yards there is a shell garage selling at 92.9p a litre and thick people still fill up 98.9p i just cant understand how stupid people are!
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Also gordon brown is telling the petrol companies to lower prices? How about you lower TAX and VAT, in this day and age petrol is not a luxury it is a necessity and should not have V.A.T. added on anyway! Gordon brown needs to go and take his tax with him.
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If you removed the tax we would probably have the cheapest fuel in the world or maybe just europe lol.
The oil companies need to make money , its like saying no business is allowed to make profit, they didn't invest money into their business to help you, or to become a charity, they are a business and are there to make money, like every other business in the world, end of!
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How come petrol and diesel were the same price per litre last year - surely the process for producung diesel hasn't changes in a year? This just makes things more expensive all round as everything is delivered by heavy haulage and just puts prices up more.
The big push for diesel cars a few years ago was that this was cheaper and cleaner. Now no one ever mentions diesel on the news or tv progammes - it's alway petrol. Now that diesel is at least 12p a litre more than petrol the government won't do anything about this as they again are reaping in loads of tax. Is anyone ever going to highlight the differences?
Hopefully one of the tv progs will eventually pick up on this - but we won't hold outr breathe!
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The explanation of what is happening with diesel is succinctly explained in last weekend's Wall Street Journal Europe- maybe not a top read for everyone - & can be viewed at this link:
http://online.wsj.com/article/SB122660972377725619.html
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I was always under the impression that diesel was less refined than petrol so why do the oil companies say there is a lack of refining capacity in Britain? If though that is he case then BUILD MORE! After all, diesel is the life blood of our commercial transport and is more eco-friendly. Why has it shot up to such a level (above petrol) so quickly, it's definitely not right, profiteering springs to mind - surprise, surprise!!!
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Just to say that walked up to my local Sainsbury's today (Thursday) and their unleaded price is now 91.9p whereas diesel has come down from £1.07.9p to £1.06.9p. So at least they are lowering the prices - although diesel could be down less - in relation to unleaded!Typical that diesel isn't a lot cheaper now that I have recently brought a diesel car!!
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If a barrel of crude oil is at an all time low, for the last three and a half years, as announced on BBC radio 4 today, why are we still paying so much at the pump? Can any one explain why diesel has become so inflated when it was so much cheaper than petrol and is cheaper to process?
Most diesel cars are much more economical than petrol cars, therefore it would make more sense to favour this form of transport, not persecute them with inflated prices?
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Re; the high price of diesel. Last year a garage in Alloa (the MVPA) sold petrol and diesel for several months 'at cost price' to its members (i.e. no taxes included). The price of 35.9p was exactly the same for petrol and diesel. The owner said that this was the price he had to pay to get it and at
that time, there was probably an 8p difference in price at normal pumps. Assuming he was telling the truth about the cost price and taxes are the same on each, it does make me suspicious about 'the higher wholesale cost of diesel' argument. With diesel about 20% more than petrol at present, it just does not encourage anyone to buy a diesel car which surely makes a mockery of the government's drive to get us energy conscious.
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Why is it that the price of petrol is coming down but diesal isn't. It can't be cost, when the price of petrol rose so did diesal, but now Petrol is falling diesal isn't and the difference can now be anywhere from between 15 - 18p. Some of us got diesal as it was supposed to be the most economical way of using fuel, but alas it seems we're just another cash cow for the oil companies that no-one is bothered to fight for.
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I too was interested in the reason for the growing disparity in price between petrol and diesel and started doing a little research before I replaced my petrol car with a diesel version. I came across an interesting article in the on line version of the Wall Street Journal by Guy Chazan titled 'Careful what you wish for...'which gives a pretty good explanation of the squeeze Europe is in - collapsing demand for petrol rapidly growing demand for diesel. And how is most of this shortfall being met? From Russian refineries no less. The upshot is that the open market price of diesel has opened up a big gap over petrol and judging by the background there is no reason to think this is going to change in the near future. Decided to stick with the petrol engined version.
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We are being told that Diesel has not reduced in price because of demand and lack of refining. How can this be correct when demand for fuel over the past year or so has decreased. Are we diesel users considered not as bright as petrol users and that we will not be aggrieved? As the credit crunch bites deeper and Diesel stays high then the cost of food ect also stays higher than it needs to.
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