THE company behind a petrol station in Herefordshire has spoken out about another “turbulent” week.

Kington Service Station is part of the Ascona Group, a company that says there is also more bad news on the way as refined products costs have risen again.

Chancellor Rishi Sunak last week made what was described as an unprecedented move by reducing fuel duty by 5p per litre. It was described as the biggest reduction in the last 20 years, but the question Ascona Group managing director Darren Briggs is asking is ‘was it enough?’.

Despite the cut, the RAC says average petrol prices are not fully reflecting this; petrol has fallen less than 4p and diesel by less than 3p, it said.

Big retailers such as supermarkets and oil giants Shell and BP have already passed on the tax cut, but smaller retailers said that it would take time for the fuel duty cut to be passed on.


“The duty rate reduction of 5p per litre came into effect from 6pm on Wednesday night (March 23). However, the duty reduction only applied to tanker loads of fuel that had exited a refinery or inland terminal after 6pm. This is key,” said Mr Briggs, writing in a blog posted on the Ascona website on Sunday, updated on Tuesday.

“Petrol and diesel delivered into a forecourt after 6pm, that had left a terminal or refinery gate before 6pm, would not benefit from the duty reduction.

“This led to a barrage of social media commentary as not every filling station dropped their pole sign prices at 6pm.

“The majority of supermarkets immediately dropped their prices by 6p per litre. This was a strategic commercial decision and, ultimately, they have deeper pockets than the independent fuel retailer to take a hit and lose 5p per litre.

“That said, the average supermarket forecourt has an annual volume throughput in excess of 10 million litres, compared to 2.5 million litres for an average independent fuel retailer, so that volume is quickly replaced in a day or so.

“On Wednesday, before 6pm, Ascona had 16 loads of fuel delivered to our sites across the UK. That’s around the 600,000 litres of fuel. Reducing our pole signs by the 5p per litre duty reduction would have cost £30,000.

“I took the commercial decision to sell through the older product without reducing our pole signs to maintain an already distressed retail margin that had been recovering from the previous week’s wholesale price increases where we had been attempting to price as close to the supermarkets as much as possible to retain volume. Retail volume sales across the UK have been adversely affected by the current market challenges.

“Once our new loads of fuel had been delivered and the older product had been sold through the pumps, we of course dropped prices by 6p per litre (5p duty plus VAT) and match as close as possible to the supermarkets where commercially viable.”


And Mr Briggs expects things to get worse this week, predicting that pole sign prices will rise above £1.80 per litre.

“Over the last week we had some sites losing over 4p per litre on diesel sales when blending the margin with the commercial fuel card rebates,” he added.

“The Independent fuel retailer ‘enjoys’ an extremely low rebate of between 1.2ppl to 1.5ppl when a customer uses a commercial fuel card for payment. However, the rebate is added to the previous (load) cost price. In a fast-rising near vertical market some forecourts will actually lose money accepting commercial fuel cards. We did.

“Ultimately this can result in higher prices for diesel on pole signs to offset the loss.

“So next week, more bad news, as refined product costs for petrol and diesel have risen by approximately 5.8p and 12.5p per litre respectively.

“These new increases will be applied from Monday (this week) for all loads delivered next week (based on the previous average weeks refined product costs). In effect totally wiping out the duty reduction imposed by UK Government.

“Was the duty reduction enough? In my personal opinion, no. The temporary duty rate reduction should have been in the region of 15p per litre as a bare minimum and closely monitored as the market evolves. This is a big ask.

“By the end of next week we will start to see pole sign prices rise above £1.80 per litre.”