Membership-only retailer Costco has reacted to falling wholesale market prices by cutting its petrol by 8p a liter to 147.7p per liter today. This is 12p less than the average price of a liter bought at a supermarket and 14p lower than the UK average, which the RAC says is 161.9p.
Diesel at Costco is also on sale at its 19 forecourts for an average of 171.6p – nearly 14.5p less than the UK average and 12p cheaper than a liter at the average “Big Four” supermarket, which is around 159.9.
One Costco petrol station, in Chester, is offering unleaded petrol at 142.9p per liter and charging just 166.9p for diesel.
RAC Fuel Watch forecasts that petrol and diesel prices should “fall sharply” in the coming days and weeks after fears that drivers would see costs creep up towards the end of the year.
Earlier this week, the RAC called on the “Big Four” supermarkets – Asda, Morrisons, Sainsbury’s and Tesco – to slash their prices.
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The organization called on them to do this in response to falling wholesale costs and to help drivers who have been hit with all-time record prices this year.
Simon Williams, fuel spokesperson for the RAC, said the move by Costco to cut prices demonstrates how overpriced fuel is elsewhere.
He added: “Drivers who aren’t fortunate enough to be members of Costco will no doubt be horrified to see just how cheaply fuel can be sold.
“It’s no wonder you often see long queues for fuel at Costco. In fact, they recently had to change the queuing system at their Bristol forecourt to cope with the number of people wanting to fill up.
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“Even accepting that Costco operates on pretty thin margins, the supermarkets should be slashing their prices,” he told Fleet News.
The fact that petrol and diesel can be sold for 12p per liter less than is currently being charged on average at the big four supermarkets is very concerning, says Williams.
The retailer has 19 forecourts across the UK including Birmingham, Edinburgh, Liverpool, Manchester and Southampton.
The RAC has consistently urged drivers to shop around, with smaller, independent forecourts usually offering more competitive prices than supermarkets.
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Asda has traditionally been the most aggressive supermarket on fuel prices, but while it’s still the cheapest of the big four, it seems far less keen to lower prices in a falling wholesale market than it has been in the past.
Mr. Williams continued, saying: “On Tuesday this week we called on them to cut by 5p a liter but since then wholesale costs have fallen even further, so they should really be cutting by at least 7p.
“Given the huge gap between wholesale fuel prices and the averages charged by the supermarkets, it could be argued that drivers are being deprived of the benefit of the Government’s 5p duty cut.
“This is unfair and we hope it is being duly noted by both the Government and the Competition and Markets Authority which is currently investigating UK fuel retailing.
“Other than trying to fill up somewhere cheaper there’s very little drivers can do to avoid shelling out more than they should have to in the cost-of-living crisis.”
The RAC highlighted the UK price of fuel overseas, pointing to the average price of petrol being just 158p and diesel at £1.66 for a litre.
Across the Channel in France unleaded is 148p despite duty on petrol being 61p a liter and, while duty on diesel is currently charged at 53p – the same rate as the UK, a liter only costs 159p on average.
There have been calls from many, including the former Transport Secretary Anne-Marie Trevelyan, to implement a fuel price checker for UK petrol stations to promote consistency and competitiveness with prices.
Drivers in Northern Ireland benefit from the Consumer Council Fuel Price Checker which compares the prices of petrol and diesel across the counties, showing the average, cheapest and most expensive prices.