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BP and Shell cut cost of unleaded fuel as petrol price war spreads

Greg John
Monday 31 July 2000 00:00 BST
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Cuts in petrol prices over the weekend were nothing to do with pressure from motorists, BP and Shell said yesterday.

Cuts in petrol prices over the weekend were nothing to do with pressure from motorists, BP and Shell said yesterday.

Both companies said reductions in the cost of unleaded fuel were a reaction to falling commodity prices rather than last week's price cuts by supermarkets. Shell cut a litre of unleaded petrol to 79.9p a litre, matching moves by Tesco, Sainsbury's and Morrisons. Asda is offering petrol at 79.5p per litre at some sites. A Shell spokeswoman confirmed the reductions were the result of lower commodity prices but she added: "Obviously we monitor the competition."

BP, which cut pump prices by 1p last Monday and a further 1p on Friday, said its typical price at the pump for unleaded petrol was now 82p a litre.

A spokesman for BP said the move had been made solely because prices for petrol on the world market were falling, which meant BP was able to feed through price cuts for consumers.

Both Shell and Lasmo, the oil exploration and production company, will be reporting their half-year results this week. The City expects Shell earnings to be about £2.2bn, up 4.5 per cent on the same period last year. Lasmo is expected to report half-year figures about 10 times higher than last time, with net earnings of about £140m.

BP was criticised by motoring organisations last week for unveiling a new corporate logo, which resembles a sunflower and cost £4.6m to develop. It will cost a further £132m to implement the corporate rebrand.

Oil companies are also waiting to see the strength of the "dump the pump" consumer campaign for motorists to boycott forecourts each Monday from next week in protest at high pump prices. The protest leader, Gary Russell, said: "If we sit back and do nothing then before too long we will have the £5 gallon... I want to see forecourts become no-go areas on Mondays. This is very much an election issue now, with people blaming the Government for the high prices."

Political pressure over petrol prices continued over the weekend as the Tories launched a petition calling for lower fuel duties. Bernard Jenkin, the shadow Transport minister, said: "People are very angry and the Government has seriously underestimated people's feelings about this."

In Scotland there were claims from the Scottish National Party that high fuel duty was undermining the tourism industry. Fergus Ewing, shadow tourism minister in the Scottish Parliament, said foreign holidaymakers faced motoring costs up to one-third more than in their own countries. This was one of the reasons the number of overseas visitors to Scotland had fallen by 10 per cent, he said.

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