Drivers ‘could pay more at the pump after Sainsbury’s-Asda merger’

Motorists could be forced to pay more for fuel after the Sainsbury’s-Asda merger, according to an ex-government minister and the founder of FairFuelUK.

Former education minister Robert Halfon and the pressure group’s Howard Cox have written to Andrew Tyrie, chairman of the Competition and Markets Authority (CMA), demanding that an independent pump price monitoring watchdog be created.

The pair claim that the merger between the supermarkets, which the chains hope to finalise by autumn 2019, could see motorists “hammered at the pumps by an increase in petrol prices”.

In the letter, the Harlow Tory MP and Cox say: “Pump prices across Asda’s and Sainsbury’s outlets can differ by as much as 5p within just 30 miles. Across the UK the difference is even more marked at 12p. So, will the merged business take this opportunity and pick the highest of each other’s prices?

“With 50 per cent of all fuel sold through supermarkets, this merger could impact severely on the cost of filling up for the already highest-taxed motorists in the world. What will Tesco and Morrisons do too as a consequence?

“Until now, the big four supermarkets’ bulk fuel buying power has kept the big oil company forecourts from hiking prices too much. They have created some competition amongst all fuel retailers, and consumers benefit as a result.

“But the supply chain continues to go unchecked, so any reduction in fuel supply competition at the pumps is bad news for hard-pressed motorists, van drivers, truckers and the economy.”

The letter adds: “With this imminent merger, it’s even more vital that an independent pump price monitoring watchdog is created, to ensure pricing transparency is guaranteed. We have Ofcom, Ofgen [sic] and Ofwat, so why not PumpWatch?”

A survey published last week by FairFuelUK, which received 47,887 responses, found that 46.2 per cent of people believe supermarkets that sell vehicle fuel operate a pricing cartel at the pump and 75.5 per cent of people think the same of oil corporations.

RAC fuel spokesman Simon Williams said: “While there is clearly potential for fuel prices to be set at the same levels at both stores’ forecourts, we are hopeful that, as long as both brands continue to trade separately, they will carry on using fuel prices as a way to attract people into their stores.

“In addition, as both supermarkets have quite different customer bases, with Asda competing in the discount space, it will still have a desire to offer cheaper fuel, as this is something its customers have come to expect.

“We know fuel price competition between both brands is currently responsible for some very low prices in certain areas of the country, such as Taunton in Somerset, where prices are often 10p lower than the UK average. We strongly hope these very welcome ‘low price’ anomalies will not be the first casualties of the merger and, in doing so, become a very worrying sign for the future.”

A spokesperson for Asda said: “No right-minded retailer would look to increase prices in a competitive market where customers vote with their feet. Asda has a proud reputation for keeping prices low for customers and will continue to do so.”

Sainsbury’s has been contacted for comment.