Household Bills
Diesel falls 5p in July as retailers pass on wholesale price savings
The average price of diesel fell 5p a litre last month as retailers finally began passing on wholsale price savings to consumers.
According to the RAC Fuel watch for July, diesel at the pumps was 120.63p at the start of the month, but by the end it had dropped to 115.74p.
This saving meant that the cost of filling up an average 55-litre diesel family car, such as a Ford Focus, dropped by £3 in a month.
On 29 July, the country saw the first forecourt price flip between diesel and petrol since summer 2001 with diesel at 116.28p, just below the average petrol price of 116.64p.
Half a penny a litre also came off the petrol price in July, which fell from 117.05p to 116.51p.
Both petrol and diesel wholesale prices remain low as a result of the price of oil falling below the $60 a barrel mark on 3 July and remaining there ever since.
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In the course of the month the oil price fell 9% from $61 to $52 a barrel. This combined with the pound staying strong against the dollar at $1.56 is keeping petrol and diesel cheaper.
The RAC expects competition to drive prices down further.
“If the supermarkets continue to battle over prices as they pass on further wholesale cost savings, pump prices should reduce to around an average of 111p a litre – a price last seen in January 2010. This would shave another £2 off a tank of diesel. To put this in perspective, this is even lower than the 113p average price reached in January after oil hit a near six-year low of $45 a barrel,” said RAC fuel spokesman Simon Williams.
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