Friday, 14 March 2014

Is Tesco's new fuel discount any good?

Filling up

Tesco has launched Clubcard Fuel Save, a new discount scheme which gives you money off fuel at the supermarket. Anyone who spends £50 in store will get 2p off per litre of fuel. However, the more you spend in a month, the bigger discount you can get.

So is this a good deal?
The way it works is that for every £50 you spend, you get 2p off per litre, so if you spend £100 you'll get 4p off, if you spend £200 you'll get 8p off. This applies all the way to a maximum spend of £500 for 20p off per litre.

You can choose to spend your discounts as you go along. Alternatively you can save them within each calendar month for a bigger discount. So, for example, if you have one shop of £100, one of £50, one of £30 and one of £20, you'll get them all added together for 8p off per litre.

There aren't any vouchers with this scheme. You just need to swipe your Clubcard each time you shop, and the points will be added to your card. Then if you swipe your Clubcard when you pay for your petrol, the discount will come off automatically.

So how does it compare?
The supermarkets are already competing heavily on fuel prices. This week Tesco cut the price of both petrol and diesel by 1p, and Asda responded by cutting the price of petrol by 1p and diesel by 2p. This came just two months after the last price war which saw them do something similar.

There are those who highlight that when Asda announced its price cut in January it said that motorists would pay no more than 126.7p per litre for petrol - and when it announced another 1p cut in March it still said motorists would pay no more than 126.7p per litre - so it would appear that in between the price has been allowed to drift up unnoticed.

However, the supermarkets remain incredibly competitive for fuel even without a special deal. The AA says that at the moment the average supermarket fuel is 1.6 pence per litre cheaper than the overall UK average - and that the gap is growing.


On top of this, the supermarkets have tended to offer fuel deals sporadically to drive people to their stores. Typically every three months Tesco has offered a voucher for money off fuel when you spend at least £40 in-store.

More recently, the supermarkets have run more complex schemes. Morrisons, for example, ran a deal in February where anyone who shopped at least once a week in the store - and spent at least £40 each time - would get £10 off their shopping in the fourth week - plus a fuel coupon worth 10p off per litre.

Sainsbury's is currently running a deal for its pay-as-you-go mobile phone customers, offering 11p off a litre when you top-up £10 on your phone. As we reported at the time the deal was announced, customers who currently use a Sainsbury's phone stand to save up to £7 through the deal. Other customers can switch to a Sainsbury's SIM, but may end up saving far less when the cost of calls is added into the equation.

The Morrisons deal is likely to be more financially rewarding for those who manage to stick to the rules, and the Sainsbury's deal may be better for those who spend at least £10 a month on their phone and less than £300 a month at the supermarket. However, the Tesco deal has the advantage of simplicity, and the fact that if you already shop there, you don't have to change your habits at all to make a saving.

The answer, therefore, is that if you shop at Tesco already, and your Tesco is offering competitively priced fuel, then you're going to make a saving. However, it pays to keep an eye out for other deals which crop up in the interim, to check whether you can qualify for a bigger saving elsewhere

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