The big four supermarkets have axed diesel prices below £1 per litre for the first time in more than six years.
Supermarket chain Morrisons cut diesel to below £1 a litre on Sunday – with Tesco, Asda and Sainsbury’s following today. It comes after petrol prices dropped below a £1 a litre in the run-up to Christmas.
The RAC has welcome the move – but says that retailers have been slow in passing on savings from lower oil prices.
Spokesman for the RAC’s Fuel Watch scheme, Pete Williams, said: “The UK’s 11 million diesel drivers will clearly welcome this move by the big supermarkets, although it would be fair to say it has been slow in coming.
“The wholesale price of diesel has been around two pence cheaper than the wholesale price of petrol since a couple of weeks before Christmas so we should have seen these cuts earlier and that is what the RAC has been calling for.”
With an average tank of 55 litres, diesel drivers will save more than £10 every time they fill up compared to this time last year, says the RAC. But it’s not just a momentary blip in prices – with fuel prices expected to remain low over the coming months.
Williams added: “Saudi Arabia has reiterated its intention not to cut oil production so the world will continue to be awash with oil as demand is also down suggesting that sustained lower petrol and diesel prices are going to be around for much of 2016.
“This is great news for consumers and motorists generally for whom the cost of motoring is one of their biggest gripes. But it will also benefit UK business which runs on diesel and should be a further stimulus to the economy.”
The motoring organisation points out that around three quarters of the price we pay at the bump goes to the Treasury in fuel duty and VAT. This means there’s a limit to how low fuel prices will go – but it says that ‘a pump price of as low as 90 pence a litre is not that far-fetched’.