Petrol and diesel prices hit three-year low

Average petrol and diesel prices have fallen to a three-year low following a new spate of price cuts by the major supermarkets.

Yesterday, petrol averaged 129.12ppl at the pump while the cost of diesel averaged 133.5ppl.

The last time petrol was lower than yesterday’s price was on 23 February 2011, when the average pump price was 129.05ppl.

The typical cost of diesel yesterday was the lowest since 6 February 2011, when the average was 133.37ppl.

However, price falls in the UK lagged behind those in most of its European neighbours, according to the August AA Fuel Price report.

It cited EU Oil Bulletin data showing that price falls in other EU countries between July 7 and August 11 were much greater than in the UK.

Prices fell by 2.7% in the UK with only Italy recording a smaller fall at 1.3%, while prices in Netherlands and Belgium fell by 6.6% and 6.3% respectively, with French prices down 5% and a fall of 3.6% in Germany

The AA said there had been a near identical wholesale price reduction, in either euros or pounds, of around 5.5% between the first week of July and the first week of August, leading to price falls in Europe in the second week of August.

“Asda triggered something of a supermarket price war on Tuesday, which was enough to send average UK pump prices to their lowest for more than three years. A year ago, petrol (137.33ppl) and diesel (141.62ppl) were over 8ppl more expensive. For a typical 55-litre fuel tank, drivers are £4.40 better off,” said Paul Watters, head of AA Public Affairs.

“Asda announced on Monday that it was cutting its petrol prices to 124.7p the following day and, only then, did the other supermarkets respond nationally to lower wholesale costs.

“This delay, otherwise known as the ‘feather’ effect, left the UK lagging behind other European countries. Last week, UK holidaymakers driving on the Continent were enjoying the savings of lower European wholesale prices – those who holidayed at home didn’t.”

Watters added: “New car registrations on 1 September are likely to see more car owners switch to diesel to save fuel and money, and cut their CO2. With diesel prices at their lowest for three and half years, their decision to switch will feel even more justified.

“Although diesel drivers were short-changed around 2.5ppl earlier this summer, when near-parity between the wholesale price of petrol and diesel failed to be reflected at the pump, diesel’s current 4ppl to 6ppl premium over petrol at the pump is considerably better than the 13ppl to 14ppl additional cost that killed off the ‘dash for diesel’ in 2008.”