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Is fuel price war over?

Three of the big four supermarket groups appear to have stopped trying to compete with Asda on fuel prices, according to the RAC.

Its Fuel Watch reports that since mid October the other supermarket fuel retailers have chosen not to compete as closely on the price of unleaded petrol, and they are charging up to 4ppl more than Asda.At the end of December a litre of unleaded petrol cost an average of 117.23p at the four biggest supermarkets, and diesel was 126.76p. The average price at an Asda forecourt, however, was 114.7ppl for petrol and 125.53ppl for diesel.

RAC fuel spokesperson Simon Williams said: "Normally, the other three supermarkets are 1ppl to 1.5ppl more expensive on unleaded, but our data shows that since October they have abandoned this strategy in favour of pricing 2.5p to 4p higher for a litre of petrol.

"The decision by all supermarkets to take more profit on a litre has led to every driver having to pay more to fill up than they should have to.

"This is because the UK average is negatively affected as other retailers are not being forced through competition to lower their prices."

He said this was a highly unusual situation and drivers could be paying 3ppl more for their fuel.