Petrol Prices Cut By Supermarkets
PRESS ASSOCIATION -- Supermarkets have stepped up a forecourt price war by cutting petrol prices for the second time in a week.
Tesco plans to reduce its pump prices by up to 2p a litre from Monday, on top of the 1p cut announced earlier in the week.
Rivals Morrisons, Sainsbury's and Asda have also made similar moves as firms use the forecourt as a key battleground for attracting shoppers to their stores.
The downward pressure on prices comes after recent financial turmoil caused a sharp slide in commodities.
Oil prices have tracked the decline in stock markets, with New York listed crude down to around 85 US dollars (£52) a barrel from 100 US dollars (£61) last month and 115 US dollars (£70) in May.
However, prices on Britain's forecourts have not mirrored the oil price drop, with unleaded petrol costing on average 1.8% more than in early April.
The AA said last week that the average cost of unleaded petrol last week stood at around 136.5p a litre, just a penny short of the record seen in May. Diesel was priced at more than 140p a litre.
The industry points out that some 60% of the pump price is accounted for by fuel duty and VAT, with another 10% going on delivery costs, marketing and profit margins.
The weaker performance of sterling against the dollar has also offset the drop in the price of crude.
Commodity prices have slumped amid concerns the first-ever US debt rating downgrade will batter already weakening consumer confidence and hurt economic growth.