Diesel could drop to £1 a litre as fuel price war reignites

DIESEL could fall to £1 a litre for the first time in six years this summer as Britain’s supermarket price war intensifies, experts claim.

Today, Morrisons will become the latest firm to cut its fuel costs, slashing its diesel prices by 4p to around 107p a litre.

It will also cut its petrol prices by 1p to an average of 112p a litre.

The reduction will reignite the price war which have driven down the cost of diesel in recent weeks – giving Britain’s hauliers and holidaymakers a boost.

Rivals Asda, Tesco and Sainsbury’s have also slashed prices in recent weeks.

At the end of July, a fall in global oil prices pushed diesel below the cost of unleaded petrol for the first time in 14 years.

The RAC now predicts that the average UK pump price could drop to £1 a litre for the first time since 2009, as worldwide supply outstrips demand, bringing down wholesale costs.

It comes as crude oil dipped below $50 a barrel last week, less than half its level last summer. This was driven by record production in Saudi Arabia, which opened two new oil refineries this year, as well as slowing growth in China.

Simon Williams, the RAC’s fuel spokesman, said falling diesel prices were ‘great news for motorists and holidaymakers’.

According to the RAC, the average price for diesel is currently 114.6p a litre, and slightly higher at 115.9p a litre for petrol. Mr Williams said: ‘With an abundance of diesel, lower wholesale oil prices and the relatively strong pound against the dollar, there is a real prospect we will see diesel at £1 a litre.

‘ We would like to think that prices will now keep falling over the next few weeks as retailers pass on the savings in wholesale prices.

‘At the moment, there is too much diesel being produced for the global demand, so prices should keep falling until they cut production, which hasn’t happened so far.’