The price of diesel fell by 4p per litre (ppl) in February according to RAC Fuel Watch data, the 11th biggest monthly drop in pump prices since 2000. This means the cost of filling up a 55-litre diesel family car is £2.33 cheaper at £69.87. In comparison, petrol fell by 3p a litre to 124.02p, (its 19th biggest drop in a month) making filling the same car is £1.61p less than it was in January at £68.21.
Of the four largest supermarket fuel retailers, Asda is ahead, selling petrol for 116.78ppl – 3.5p lower than it was at the start of February and 3.5p cheaper than its closest competitor. Asda also reduced diesel by 5.9p to 118.8ppl, 4p cheaper than its nearest rival. The average price charged for unleaded between all supermarket sites is currently 5p less than the UK average prices.
These reductions are as a result of a $10 drop in the price of a barrel of oil. By the end of the month they had dropped from a high of $60.28 on 20 February to $50.41. At the start of the month a barrel was priced at $53.48.
This resulted in the wholesale price of unleaded dropping below 90p a litre before delivery, retailer margin, and VAT.
The last time a price this low occurred, was In January 2019 and led to an average UK pump price of around 119ppl. In order to charge drivers a fair price, RAC is calling on retailers to keep slashing pump prices. It believes this is a better reflection of the wholesale market.
RAC Fuel Spokesman Simon Williams said: “While it is good drivers are benefitting from lower forecourt prices, in reality the wholesale price is such that the big four supermarkets, which dominate UK fuel retailing, should cut their prices again.
“At the moment both fuels are 6p a litre too expensive which means for petrol we should really be seeing a UK average of 118p.
“Unfortunately, we don’t think diesel will come down to the 2017 price of 119p a litre due to wholesale prices only dropping to 92p a litre briefly as a result of oil suffering its biggest weekly decline in more than four years.”
Williams suggested the oil price has fallen due to the spread of the coronavirus prompting fears of slower global demand. This may well lead to a move from oil producer group OPEC and its allies to restrict production. An extraordinary meeting in Vienna on Friday March 6 may illuminate this situation.
“If they decide to take action to prop up the barrel price it would very likely put an end to falling forecourt fuel prices,” said Williams.