Asda, Tesco, Sainsbury’s and Morrisons all cut fuel prices over the weekend by up to 2p a litre. Asda now guarantees a litre of unleaded will cost no more than 109.7p nationwide: diesel is cheaper still – a guaranteed 106.7p a litre.
The price cuts are filtering through thanks to the plummeting price of oil: “Brent Crude is now nearly 25% cheaper than it was two months ago,” said RAC spokesman Rod Dennis, “and is just half a dollar from being at its lowest price all year.”
Combine this with a strong pound and you’ve a perfect recipe for lower fuel pump prices.
There’s more to come too, said Dennis. “If the conditions stay right, we could see some even lower prices in a few weeks as people return to work after the summer and the school run begins again.
“And if Brent Crude were to move to the $40 per barrel mark, the prospect of some enterprising retailers selling fuel for £1 per litre will make a return.”
Why have fuel prices taken so long to fall?
Of course, oil prices have been falling for some time now, but it’s only in recent weeks that pump prices have started to reflect this. Why the delay – are fuel companies taking us for a ride?
Not so, said Dennis. “The reason we’ve been slower to see unleaded price cuts is because the wholesale price of petrol – the price retailers buy the fuel for – has not fallen at the same rate diesel has.
“Diesel has been on a steady downward path since the start of May, driven by increased capacity from Asia, but the same cannot be said for petrol.”
At last, though, the wholesale price is beginning to drop – question is, how low can they go?