June 12, 2002. Copyright 2002. Graphic News. All rights reserved.

Price war at the petrol pumps

LONDON, June 12, Graphic News: Petrol prices in the UK are among the highest in Europe. Now Safeway has triggered a price war among supermarket chains with its decision to cut the price of its petrol by as much as 20 pence a litre.

Safeway customers are being rewarded with bigger cuts in fuel prices if they spend more at the checkout.

The chain has introduced a rising scale of discounts, so that customers who spend £25 in the store will get 2p off a litre at Safeway petrol stations and those spending £150 will get a reduction of 20p a litre.

With the highest reduction, a litre of petrol will cost 53.8p -- which is close to what motorists pay in Spain -- and mean a saving of approximately £10 for anyone filling up an average family car.

In May, the average price for a litre of petrol was 74p but 56p of that amount went directly to the government in fuel tax and VAT.

Motoring organisations have given a mixed response, saying that while it means cheaper fuel, it also hurts Britain's 7,000 independent petrol stations, which are closing at rate of 500 a year.

But Richard Freeman at the motoring organisation the AA said: ÒAnything that reduces the price of petrol in the UK has got to be good news. Supermarkets have been a very good force in reducing prices as much as possible.Ó
/ENDS

Source: AA