Supermarkets 'killing' garages

PETROL stations are being forced to close at the rate of two a day by 'unfair' competition from the supermarkets. The total number of forecourts in Britain dropped by more than 600 last year to fewer than 10,000 for the first time since the Forties.

Official figures later this month are due to show that 30% have been lost since the fuel crisis in September 2000.

Petrol retailers say they are being decimated by supermarkets' special petrol promotions designed to lure people into the stores.

Supermarkets use promotions - such as 3p off a litre of petrol if you spend £50 or more in the store - that make it almost impossible for smaller rivals to compete.

In recent years several major chains such as Mobil, Regent, National and Gulf have pulled out of petrol retailing in Britain, unable to make a profit.

British oil giants BP and Shell have sold off hundreds of uneconomic sites. But family-owned 'independents' have suffered most. There are now thought to be fewer than 100 inside the M25.

The number has been declining since the peak in 1973, when there were about 34,000 stations. The next year Tesco opened the first supermarket forecourt, in the North West.

About three quarters of the price of a litre of petrol is tax. Petrol Industry Association figures show the average gross profit margin on a litre was 5p last year. That can be almost wiped out by the cost of storage, distribution, running the station and merchant fees to credit card companies.

Ray Holloway, director of the Petrol Retailers Association, said motorists were becoming increasingly vulnerable should there be a petrol shortage. 'It only took four days to bring the country to its knees in 2000,' he said. 'Now there are a third fewer forecourts to cope with emergencies.'

But the supermarkets say they are committed to providing the best prices. Asda spokeswoman Rachel Fellows said: 'Where we make a saving on petrol, we pass that on to our customers. There are no gimmicks.'