Supermarkets cut fuel prices amid claims retailers failing to pass on savings

Supermarkets cut fuel prices amid claims retailers failing to pass on savings

Petrol prices in Kolkata, Mumbai and Chennai too remained unchanged at Rs 79.10, Rs 84.26 and Rs 79.33 per litre, respectively, today. However, retailers have not lowered their prices accordingly, sparking concerns that retailers are stockpiling profits ahead of a possible price war if a price dip happens, rather than matching their prices to the wholesale cost. "But given how rapidly prices can go up when the wholesale price rises, it is not right that when wholesale prices fall, many retailers seem to wait before making a headline-grabbing cut".

The retail giant has reduced the price of unleaded petrol by up to 3p per litre and diesel by up to 2p, becoming the first major retailer to do so this week.

The RAC says fuel prices have risen nearly daily since the end of April, despite wholesale costs coming down by around 2.5p per litre since May 24. As a result, the average price of a litre of petrol rose to 129.42p, while the average litre of diesel hit 132.34p. The current price for a barrel of oil is around $80, but an OPEC squeeze could send this up to $100.

The vehicle service firm said fuel prices are heavily influenced by the price of crude oil, and as that is priced in dollars, the exchange rate also plays a significant role.

Prices of both petrol and diesel have risen steadily in recent months thanks to increases in the price of oil and the pound's weakness compared with the United States dollar.

The decline in petrol, diesel prices follows the 16-day hike which jacked up fuel prices to their highest levels in India, with price of petrol reaching Rs 78.43 a litre and diesel prices Rs 69.31 per litre on May 29. Last month the cost of filling an average family auto rose by more than £3.

However, Brian Madderson, chairman of the Petrol Retailers Association, said: "We are in the middle of one of the most volatile periods of wholesale price movements we have seen for some time". "We are now well into June, and drivers are still waiting for some relief to rising prices".

He added that he could only see petrol prices going up as volumes of sales fall due to the take-up of hybrid and electric cars as retailers try to maintain margins.

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