Cuts of 3ppl in average petrol prices by Christmas, with diesel down 5ppl are being predicted by the RAC following significant falls in the price of oil, and the big four supermarket groups all knocking 2ppl off their prices.
The motorists’ organisation said this meant prices of £1 per litre should become commonplace.
RAC Fuel Watch data shows oil slipped following OPEC’s meeting in Vienna last Friday where delegates dismissed cutting production to stabilise the price. The end of day price for a barrel of Brent crude fell from $41.80 last Friday to $39.77 on Monday. Twelve months ago a barrel cost $65 and in June 2014 it was $115.
This led to significant reductions in the wholesale price of both unleaded and diesel which the RAC believes will lead to a cut of 3ppl in the average price of petrol and 5ppl off diesel, taking average prices to around 103ppl for petrol and 104ppl. Diesel is already at a six-year low, with the average price reaching 109.18p on Friday.
RAC Fuel Watch spokesman Simon Williams said: “With the price of wholesale unleaded dropping due to oil falling below $40 the climate is right for £1 a litre petrol, all we need is for the supermarkets to do the right thing and embrace the season of goodwill by passing on those savings at the pump to make Christmas that bit cheaper for everyone.
“Motorists have already enjoyed petrol at under £1 as one supermarket cut prices at its 277 nationwide forecourts as part of a three-day promotion at the end of November, but this should now become a common sight across the country.
“The long-term outlook is for the oil price to stay low. OPEC is not due to meet again until June 2016 so unless an extraordinary meeting is called, it is anticipated production will continue to outpace demand and in turn keep wholesale fuel prices low.”
Shortly after the RAC released its predictions on Tuesday December 8, Tesco announced it had cut 2ppl from its prices from 11am that day, and the other three groups said they would implement the same cut the following morning.
This means that Asda’s national price cap stands 101.7ppl for petrol and 104.7ppl on diesel.
Andy Peake, Asda’s senior petrol director, said: “We’re giving drivers an early Christmas present as fuel prices continue to fall. We know how important it is to pass savings back into motorist’s pockets in the crucial run-up to the festive period.
“We know our competitors are likely to follow but Asda don’t have a postcode lottery on fuel meaning no matter where customers live, they will benefit from the same fuel price.”