After four consecutive months of pump price rises, the average cost of petrol on Britain’s forecourts has started to fall again, data from the RAC’s July Fuel Watch report shows.
While the reduction in the price of unleaded is only small – 0.41ppl from 112.20ppl to 111.79ppl – it reverses the rising price trend which began in March. The average price of diesel also fell, but even more slightly (0.06ppl) from 112.47ppl to 112.41ppl.
The report says the fall in pump prices has been brought about by a reduction in the wholesale cost of both petrol and diesel.
It adds that unleaded petrol fell by 4.41ppl and diesel by 4.67ppl in July, caused primarily by a $6.44 – or 11% – fall in the price of a barrel of oil, down from $48.07 on 1 July to $41.63 on 29 July.
This reduction in the price of oil has meant the devaluation of sterling following the UK’s Brexit vote, which some had feared would lead to a price hike because fuel is traded in dollars, did not impact wholesale fuel costs negatively. Throughout July the value of the pound maintained an average of $1.31 against the dollar.
RAC fuel spokesman Simon Williams said: “July’s slight reduction in fuel prices is very welcome as it has ended four months of rising prices on the forecourt. We are hopeful that the early August supermarket cut will make a bigger difference to household budgets in the summer holiday period even though it came more than a week later than it should have.
“The falling price of fuel on the wholesale market is being driven by fears of slowing global economic growth adding to an existing oversupply of both crude oil and refined products such as petrol and diesel. Interestingly, this has happened at time when there are oil supply disruptions in Nigeria and Libya which had they not occurred would have meant there was even more oil on the world market.
“As it is motorists continue to benefit from the lower oil price which had led to petrol prices that are nearly 5ppl cheaper than a year ago and diesel that’s more than 3ppl less expensive.”