Petrol prices could drop to 99p a litre
THE fuel price war is driving the cost of petrol back t owards 99p a litre, experts said yesterday as the Big Four supermarkets announced another price cut.
Asda once again led the charge by slashing a further 2p off the price of unleaded and 1p off the price of diesel across its UK forecourts, with Morrisons, Sainsbury’s and Tesco swiftly following suit.
With the price of crude oil plummeting – it has fallen to below $60 a barrel this week – the RAC said it was ‘optimistic’ that petrol could dip below £1 a litre in the new year.
This would take prices at the pumps to their lowest level since the end of May 2009 when the average price was 99.9p.
The supermarket price cuts – the latest in a series over recent weeks – will force rival retailers nearby to reduce their prices, but a ‘ postcode lottery’ has developed where petrol retailers without an Asda store nearby have been more sluggish in cutting prices.
Asda’s latest cut, which takes effect today, means customers will pay no more than 110.7p a litre for petrol, with diesel costing 117.7p a litre.
On September 28, Asda’s petrol price was as high as 126.7p a litre, with diesel at 129.7p a litre.
Fuel price-trackers Experian Catalist said that on Tuesday, before the latest price drops, unleaded was selling at an average UK price of 116.32p per litre – compared with a high of 141.48p in April 2012. Diesel was at 122.16p.
Motorists have already seen £1 knocked off the average price of a fill-up after prices plummeted by more than 2p over the weekend. The RAC predicted that within the next fortnight, average UK petrol prices would fall to below 110p a litre and diesel to under 116p.
RAC fuel spokesman Simon Williams said: ‘We have every reason to think petrol at under £1 early in 2015 is a very real prospect.
‘The cost of visiting family and friends this Christmas will be the cheapest it’s been for nearly five years, but the prospect of petrol going below £1 a litre in the new year is incredible, particularly when prices at the beginning of 2014 seemed to be heading ever upwards.’
The RAC said motorists have become so used to high petrol prices that many had forgotten that they had ever been less than £1 a litre.
The RAC said in a report that it was ‘ optimistic’ that petrol prices could fall below a litre because the price of Brent crude has fallen below the $60 a barrel mark for the first time since early July 2009. It is predicted to ‘keep on dropping’ after the Arabdominated oil cartel OPEC – the Organisation of the Petroleum Exporting Countries – indicated that it will not cut production ‘even if oil hits $40 a barrel’.
The RAC added: ‘In July 2009 the average price of unleaded was 103.09p a litre and diesel 104.22p, due to the slightly stronger pound which affects pump prices as fuel is traded in dollars. The pound is currently a little weaker than it was then at $1.57. There is a very good chance forecourt prices will continue to fall as the price of a barrel of crude goes lower.’
Asda’s petrol trading director, Andy Peake, said: ‘We’re giving drivers an early Christmas present as fuel prices continue to fall. It is our 11th price cut since September.’
Morrisons’ petrol director, Mark Todd, said: ‘Recent wholesale price drops have allowed us to pass savings on to the customer.’
‘Lowest level since 2009’