Tesco boss denies profiteering as fuel sales soar by 44 per cent to £2billion in first three months of the year
- Fuel prices are continuing to soar to record levels as the cost of living crisis bites
- Motoring bodies and other retailers claim supermarkets are pushing up prices
- Tesco CEO Ken Murphy denies this and there is no evidence of profiteering
The CEO of Tesco has denied the company is profiteering from rising fuel prices despite seeing a 44% increase in sales value to £2 billion in the first three months of the financial year.
The cost of living crisis has been driven by rising fuel costs, with prices spiraling towards 200p per litre in the UK and also increasing around the globe.
It now costs more than £100 to fill up an average size tank in a family car – and many hard-pressed households have reported rationing car use to try and save money.
The price of unleaded hit a new record of 187.51p per litre yesterday (June 16) with diesel reaching yet another high of 194.17.
The government is facing criticism for not doing enough to tackle rising fuel prices.
Chancellor Rishi Sunak announced a 5p cut on fuel duty earlier this year which Tesco claims was passed on to customers immediately.
But campaigners pointed out the scale of the problem meant the cut was wiped out within days as prices continue to increase.
Meanwhile, fuel sales soared by 44% to a value of £2billion as Tesco’s petrol and diesel prices rose.
Ken Murphy, Chief Executive of the retail giant, said the cost of living crisis for customers is ‘unprecedented’.
Chief exec Ken Murphy denied any allegations Tesco was taking advantage of rising prices to profit from them, adding: ‘I see no signs at this stage that there will be an easing of the pressure on fuel prices’
Petrol and diesel prices have risen to an all-time high and continue to climb. Tesco says it passed on the Chancellor’s 5p cut on fuel duty to customers the very same day it was announced
Price rises have become steeper in the last month with diesel already exceeding 190p per litre and heading towards 200p
Mr Murphy cautioned that he did not expect pressure on fuel prices to ease and stressed that the supermarket should not be seen by customers as a profiteer from recent increases.
He said: ‘I see no signs at this stage that there will be an easing of the pressure on fuel prices.
‘When the Government passed the through the fuel duty changes, we passed that onto customers the same day.
‘There are no signs of relief in prices in the short-term. We lack visibility and so much of the pricing is still linked to the situation in Ukraine.’
Tesco is the UK’s largest petrol retailer seeing 16% of sales across the country.
But despite some motoring bodies and independent petrol retailers that the supermarket giants are pushing up prices by profiteering, Mr Murphy denies they company is doing this.
He said: ‘I think we demonstrated clearly throughout the pandemic that we are on the side of the consumer…it’s a very emotive topic but our price position [on fuel] has not changed and won’t be changing.’
In upmarket Chelsea in central London, bosses of one forecourt were this week branded ‘absolute charlatans’ for selling petrol at £2.50 per litre.
But Mr Murphy himself has faced backlash since he started as the firm’s chief executive in October 2020.
In the year to February he was handed a pay packet of £4.74 million including a £1.54 million basic salary for the year to February.
This was boosted by around £3.2 million of performance-related bonuses after supporting the company’s recovery during the pandemic.
Figures also reveal Tesco’s group pre-tax profits jumped to £2.03 billion in the year to February 26, up from £636 million the previous year.
This amounts to 224 times the pay of the average Tesco worker.
Ken Murphy’s pay deal was 224 times the overall pay of a median Tesco staffer at the firm
Tesco is far from alone in raising prices to match the increased cost of purchasing fuel, with some stations already selling diesel at 199.9p per litre
In February, the RAC claimed the big four supermarkets – Tesco, Sainsbury’s, Asda and Morrisons – were taking a profit margin on unleaded petrol of 8.6 per cent. It said this was more than double the 3.2 per cent that was typical before the pandemic in 2019.
RAC fuel spokesman, Simon Williams, suggested the big supermarkets should be looking to cut prices.
He said: ‘We’re hopeful that the scale of the recent increases is at last slowing and we’d expect the largest retailers who buy fuel most frequently to stop the pump price rot and even look at reducing their prices soon to reflect the fact they’ve been benefiting from lower wholesale costs.’
The Business Secretary, Kwasi Kwarteng, has now asked the Competition & Markets Authority (CMA) to investigate allegations of profiteering.
Specifically, it is looking into whether the supermarkets and others pocketed the 5p drop in Fuel Duty announced by the Chancellor, Rishi Sunak, at the end of March.
There is no evidence to suggest Tesco has been taking advantage of customers.
Prices have risen by around 40% since the beginning of the year, which could account for the rise – as well as other customers switching from more expensive fuel stations.
The pandemic saw supply disruption and decreased demand for fuel almost everywhere in the world – and then prices quickly rose once demand increased again.
The war in Ukraine is also dramatically affecting fuel costs – by disrupting trade around the world and forcing much of the west to withdraw from using Russian oil and gas.
Expert reveals how YOU can make your tank last up to 40 per cent longer amid soaring fuel prices
Karl Dyson (pictured) is the editor and founder of hypermiler.co.uk, a website providing advice on how to get the most from your mileage
Karl Dyson, editor and founder of hypermiler.co.uk, a website providing advice on how to get the most from your mileage, has revealed seven top tips on how you can make your fuel last longer.
Here they are below:
1. Before you even turn the key, ensure your car is fully maintained. If you abuse your car and never service it or change the oil it’s not going to run at peak efficiency. Check the tyre pressures – as a lower tyre pressure means increased drag and means you’re using more fuel to turn.
2. You can reduce weight if you’re carrying around items that could be heavy which don’t need to be in the car – removing roof and bike racks, roof boxes, all make a difference and reduces aerodynamic drag without even getting in the driver’s seat.
3. If you have to put fuel in, make sure you’re buying it from the cheapest place in your area by using an app like PetrolPrices.com. If you can get fuel for 5-10p a litre cheaper and you can see that on a map then that’s brilliant.
4. Choose your route: it might only be five miles to work but that might be through a busy urban area with lots of stopping and starting. There might be a longer route with less start-stopping which is a more consistent drive, not on the brakes or accelerator, which means it can be more efficient to go the longer way.
5. Once you’re in the car, the key thing to hypermiling is anticipation. It’s about driving to the road, traffic and weather conditions. You can minimise the use of brakes and accelerator and drive smoothly which means you can utilise other hypermiling techniques like coasting.
If you can see a Stop sign before you come to it you can slowly ease off in plenty of time, if you’re in-gear coasting in most modern cars you don’t use any fuel whatsoever and the smoothness makes driving a much more pleasurable experience.
6. Another thing to point out is speed – travelling at 56 miles-per-hour as opposed to over seventy can save up to 35 percent in fuel and means you can do other things like slipstreaming, where you use the car in front to part the air and create less aerodynamic drag on your car.
If you are slipstreaming, you can do this behind HGVs but it needs to be a safe distance away taking into account road, weather and traffic conditions, following the two second rule that’s enforced by road safety laws.
7. Coming into the summer, there’s a few things you can do to help yourself: parking in the shade means when you get in the car you don’t need to reach for the aircon which can sap anything up to ten per cent of the fuel efficiency of the vehicle.
Driving at anything under 40 miles-per-hour it’s more efficient to have the windows open, but anything over 40 is probably better to have the air-con on. And if you’re going to have the air-con on, you should use the recirculation button so it cools down air that’s already in the car.
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