Why do supermarkets sell fuel cheaper than local garages?

Supermarkets often sell petrol as a loss leader to entice motorist/customers into their store. A supermarket chain can buy in bulk and get a discount off the fuel suppliers.

Depending on the supplier, many do not routinely offer large retailers discounts based on sales. Most non oil producing countries find that the supply is governed by the import supplier and the prices for outlets fixed (basically heres the price take it or leave it). Retailers use a system as stated above of either "loss leader" or as in most cases "off set pricing". The latter means that high demand items can be used where a very small price is added the normal selling price. This is undertaken across the range and in that way profits can be better managed whilst appearing to show the retailer making little on the petrol revenue.