Average UK petrol prices fell by their largest margin in 12 years in March, triggered by a collapse in the world oil price, new RAC Fuel Watch data shows.
The price of a barrel of crude oil began the month at more than $50, but by the end of March it had plummeted by 66% to less than $18, its lowest level in 18 years. This was due to a combination of plunging demand in the wake of the coronavirus outbreak, and a glut in oil due to oil producing nations being unable to agree a deal on how to cut supply.
This fed down into forecourt prices, with the average price of unleaded down more than 9ppl came in the month, with prices falling from 122.72ppl to 113.54ppl, while the price of diesel was down by nearly 8ppl, from 125.7ppl to 117.8ppl. These are the largest single month price reductions since October 2008.
The supermarkets announcing unprecedented single price cuts on 23 March were the main contributer to the overall monthly price drops. Morrisons was the first supermarket to announce a 12ppl cut in petrol and an 8ppl cut in diesel prices, with prices at the supermarket down to around 104ppl for petrol and just under 111ppl for diesel by the end of the month. Asda retained its position as the supermarket selling the cheapest fuel, with petrol down 14ppl in the month to 102.7ppl, with diesel down to 108.7ppl.
Based on the reductions in the wholesale price of unleaded and diesel – down 16ppl and 10.5ppl respectively last month – the RAC claimed there was scope for retail prices to come down further, to 98ppl for petrol and 108p.
RAC fuel spokesman Simon Williams said: “Wholesale fuel prices have slid so far that there remains scope for further price cuts, but we are very mindful at this time of the pressure this can place on smaller, independent forecourts that provide a vital service in areas where there is no supermarket footprint. While we all want reasonably priced fuel for our essential journeys, none of us want to see smaller enterprises going out of business trying to match the supermarkets’ big price cuts at a time when so few of us are driving compared to normal.
“While the impact of the coronavirus on travel and oil demand continues, there are early signs that the oil price won’t stay as low as it has been in recent days for much longer. The price war that has been raging between two big oil producing nations, Saudi Arabia and Russia, may be reaching its end if recent statements from the US are correct – but it is very early days and something we will keep a close eye on.”