Asda, Sainsbury, Morrisons Cut Fuel Prices

Posted on: Dec-2018 | Others

The sharp fall in international fuel prices has prompted convenience stores like ASDA, Morrisons and Sainsbury to cut down on prices of petrol and diesel. The cuts were spearheaded by ASDA which cut its petrol rates by 1p per liter and of diesel by 2p per liter. The other two chains, then followed suit as motoring groups have been criticizing supermarkets for not reducing fuel prices while wholesale prices have fallen drastically. Dave Tyrer fuel buyer of ASDA confirmed that if there is a further decline in wholesale markets they will reduce prices again as its unleaded petrol rates fell by 9p a liter since October.

After hitting a high of £ 1.27 per liter for petrol and £ 1.35 per liter for diesel during early October the prices of fuel have been falling with reduction in international crude oil rates. Towards the end of this week price of Brent crude fell below $60 per barrel its first reduction since 2017 when it was trading at $59.44 per barrel. The price of crude has been falling due to a glut in the market as major suppliers comprising of the United States, Saudi Arabia, Iran and other Middle East nations have starting producing more than market demand.

To manage this situation the members of oil cartel OPEC are scheduled to meet next month to decide the quantity they must produce to curb over supply and bring back oil prices to sustainable level. According to commodities strategists from Morgan Stanley, OPEC group will manipulate the oil market in 2019 and will access viability of having an agreement to reduce production in member countries. Only under these circumstances the price of Brent Crude may rise up to previous levels of $70 per barrel. But RAC data shows that these price cuts are insignificant keeping in mind reduction in international fuel prices, according to which the reduction should have been at least by 5p per liter for both diesel and petrol.