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Relief for drivers as petrol prices could soon fall

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After weeks of sky-high prices, the cost of petrol could be about to fall.

Wholesale petrol costs have slumped by 3p a litre this month, which should trigger a supermarket pump price battle, according to the AA.

Over the past month, the average price of petrol has risen 1.8p a litre (up from 129.54p) while diesel has gone up a full two pence a litre (up from 132.33p).

Supermarkets are now averaging 128.1p a litre for petrol while oil company and other retailers average 132.7p.

With crude oil climbing towards $80 a barrel, drivers have been led to fear the worst. But, a combination of falling refining margins and a stronger pound should force a correction in pump prices – providing retailers choose to pass on the savings.

“Drivers were told earlier this month that there was ‘no end in sight’ to rising pump prices. Now, they should be looking for a £1.50-a-tank cut in petrol costs,” said Luke Bosdet, the AA’s fuel price spokesperson.

“The key question is to what extent and how quickly the fuel retailers decide to pass on the savings. In the past, such a significant drop in wholesale prices would have triggered a pump price battle among the supermarkets. For the moment, drivers should keep an eye out for competitive oil company sites taking the opportunity to undercut expensive supermarket sites.”

Earlier this month, Chancellor Philip Hammond hinted he would scrap the eight-year freeze on fuel duty in this autumn’s Budget, which had “saved the average car driver £850 and the average van driver over £2,100”.

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