Supermarket merger may hit drivers at the pumps

Drivers are being warned they face fuel price rises should a proposed £15 billion supermarket merger get the green light.

Campaigners say a provisional merger between Sainsbury’s and Asda could see pump prices creep up, bringing an end to the price war between two competing retailers.

The warning, from former education minister Robert Halfon, the MP for Harlow, comes as the major chains look to complete the tie-up by Autumn 2019.

The RAC acknowledges the potential for price hikes, and calls for both parties not to use the merger as an excuse to hit motorists at the pumps. 

READ MORE: Asda first to cut fuel prices after RAC plea

Sainsbury’s and Asda are currently the second and third largest grocery retailers in the UK and will overtake Tesco as the country’s biggest supermarket if the merger goes ahead.

But Mr Halfon warned that a merger would see Asda’s filling stations effectively controlled by one of its rivals.

He said: “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.

“I have serious concerns that this merger will affect market competition and there is a worry it will cause motorists to be hammered at the pumps.”

TRACK LIVE PRICES: RAC Fuel Watch

RAC spokesman Simon Williams is hopeful both supermarkets will continue to use fuel prices as a way to attract customers into their stores.

He said: “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.”

The warning comes after RAC Fuel Watch data showed UK motorists were hit by another month of rising fuel prices on the forecourt during July.