A fuel price war may soon be on the cards

Wales On Sunday - - NEWS -

FUEL re­tail­ers may be set to en­gage in a price war, the AA has said.

A 3p per litre slump in whole­sale costs this month sug­gests pump prices could be about to drop, ac­cord­ing to the AA.

This would be wel­come re­lief for mo­torists who face prices at a four-year high.

The av­er­age cost of a litre of petrol stands at £1.31 at UK fore­courts, with diesel cost­ing £1.35, Gov­ern­ment fig­ures show. But a re­cent strength­en­ing of the pound and a drop in oil re­fin­ing mar­gins “should force a cor­rec­tion in pump prices”, the AA said.

The or­gan­i­sa­tion’s fuel price spokesman Luke Bos­det said: “Driv­ers were told ear­lier this month that there was ‘no end in sight’ to ris­ing pump prices. Now, they should be look­ing for a £1.50-a-tank cut in petrol costs.

“In the past, such a sig­nif­i­cant drop in whole­sale prices would have trig­gered a pump price bat­tle among the su­per­mar­kets. For the mo­ment, driv­ers should keep an eye out for com­pet­i­tive oil com­pany sites tak­ing the op­por­tu­nity to un­der­cut ex­pen­sive su­per­mar­ket sites.”

There is grow­ing spec­u­la­tion that the freeze on fuel duty could be scrapped in this au­tumn’s Bud­get.

Ear­lier this month Chan­cel­lor Philip Ham­mond told MPs that pre­vi­ous anal­y­sis show­ing the ben­e­fits of the freeze off­set against tax losses would “have to be looked at again”.

Fuel duty has been kept at 58p per litre since 2011.

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