Fuel price wars hit small petrol stations

Supermarkets are pricing out the independent smaller forecourts. Daniel Wainwright reports:

Independent petrol stations are feeling the pinch as supermarkets sell fuel at a loss.

That comes despite overall prices at the pumps soaring to near-record levels this week as unleaded climbed above 140p a litre and diesel reached more than 144p.

MPs today warned the Government should scrap a 3p fuel duty rise planned for April.

And amid the struggles facing independent filling stations, one forecourt owner has urged ministers to make the big companies sell their fuel for more and lower the costs of their food instead.

Price wars have seen Morrisons offer loyalty points on a new fuel card while Asda has developed a mobile phone app for customers to check its fuel prices against competitors.

Waitrose on Penn Road in Wolverhampton has been offering customers 5p off per litre of fuel if they spend £50 or more in store.

Supermarkets are dropping their fuel prices and selling petrol and diesel at a loss as a way of attracting people into their stores to buy food.

But the Retail Motor Industry Federation, which represents 6,000 small petrol stations, said there were now just 8,000 such retailers compared with 21,000 two decades ago and 40,000 in 1966.

RMIF predicts that in five years there will be only 1,200 supermarket and major oil company petrol garages left, even though car usage has risen over the years.

The Office of Fair Trading (OFT) has now launched an inquiry into petrol and diesel prices at the pump.

The investigation will look into fears that the price paid at the pump does not reflect the price of crude oil and that there is little competition.

But other groups such as the Taxpayers' Alliance want the Government to act by cutting the tax on fuel. Around 60 per cent of the price of a litre of fuel goes to the Treasury.

Professor Stephen Glaister, director of the RAC Foundation, said: "We have always argued for pricing transparency and this review promises to provide it.

"Now at last we should get a definitive answer on how the market works."

There were calls today for supermarkets to put their fuel prices up and lower their food prices instead.

Shailesh Parekh, who runs a Texaco petrol station on Stafford Road, Wolverhampton, said: "Food prices have gone up as well and if supermarkets lowered the price of food everyone will benefit.

"Instead they attract drivers in by lowering the petrol and diesel price, but that means everyone is subsidising the motorist.

"It's not fair on the people who went to the supermarket by bus or on foot.

"A politician can't say to a supermarket that they should put their prices up on fuel but lower the price of food instead.

"David Cameron knows if he did that the headlines would just say he'd told supermarkets to increase fuel."

JSK Services, Brocton

He's run his garage for almost 30 years, but times have never been tougher for Bhupa Gohil.

The 60-year-old, who owns JSK Services Ltd, in Cannock Road, near Brocton in Stafford, said it was impossible trying to compete with the large supermarkets.

He said: "It seems like unfair competition, supermarkets can sell fuel at lower prices. They can do promotions like 5p off per litre, or even more when you buy so much shopping and there is no way we can compete with that.

"We have smaller margins to work with. I've heard that in the next five years up to 1,500 forecourts could close down. It's also a problem with rising fuel prices, we need to find more working capital. It is getting tougher and tougher all of the time."

Mr Gohill, who lives in Shrewsbury, employs five people. Today he was selling unleaded for 140.9p and diesel for 144.9p.

Texaco, Wolverhampton

At the Texaco garage in Wolverhampton, staff know only too well about the high cost of fuel.

Boss Shailesh Parekh makes just 5p a litre for his franchise filling station on Stafford Road in Wolverhampton. The 47-year-old said supermarkets selling fuel at a loss made it difficult to compete. He is currently selling unleaded for 142.9p per litre and diesel at 145.9p and employs six people.

He said: "I went past Sainsbury's and they had unleaded at 137.9p and diesel at 142p. I bought my unleaded at 137.3p and diesel for 138.5p.

"It means the supermarkets are selling at a loss when they offer discounts on fuel." He said the shop was competitive on food prices.

Dexi Jones, aged 24, a cashier at the Texaco station, added: "The supermarkets can put on offers to entice people to use their petrol stations. It doesn't really seem fair that they can set their prices so much cheaper."