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Asda cuts could trigger fuel price war

19 August, 2010

A fuel price war could be in the offing following Asda's announcement this week that it was cutting the price of both unleaded and diesel by up to 1ppl and 2ppl respectively.

The latest move means drivers filling up at Asda will not pay more than 111.9p for unleaded and 114.9p for diesel at any of its 180 filling stations.

The retailer has also committed to hold down these prices for at least two weeks, allowing drivers to fill up with cheaper fuel until after the August bank holiday weekend, the last big motoring get-away of the summer.

In a statement released be its press office the company said since mid-July Asda it had led a concerted effort to hold down the price of a number of core commodity items, investing millions in a targeted programme of every day low price rollbacks. It said the latest fuel price cuts followed research from the AA that showed towns without an Asda were often forced to pay up to 6ppl more a fuel.

According to Asda’s monthly income tracker, millions of families are still struggling to make ends meet. The latest figures for July show family spending power is down 4.2 per cent year-on-year, equating to a £7 fall in disposable income each week.

In addition, new research released by Asda confirmed the outlook to the end of the year remained challenging.

Cebr, which compiles the report on Asda’s behalf, forecasts UK families could face the lowest amount of disposable income in the final quarter of 2010 for two years. While they predict a modest uptick in December, disposable income in the final month of the year is still predicted to be £172 – £5 lower than December 2009 and the same level as December 2008.

Andy Clarke, Asda president and CEO said: “These are increasingly uncertain times for millions of families across the UK, and it’s clear from all the data customers will need us more than ever.

“We’re shopkeepers not economists, but in this ‘age of austerity’ we know the pennywise will thrive. Our stimulus package for the economy starts with saving our customers money every time they shop – real money that can be saved, or spent elsewhere.”

Our stimulus package for the economy starts with saving our customers money every time they shop –real money that can be saved, or spent elsewhere.”