Fuel pump prices could be slashed as wholesale oil costs fall to lowest level since 2003

Fuel pump prices could be slashed as wholesale oil costs fall to lowest level since 2003

Fuel pump costs could face further reductions if supermarkets slash prices in line with wholesale reductions as demand for oil is reduced due to the coronavirus pandemic. Yesterday, the wholesale price of oil fell below $25 for the first time since 2003 in a major blow to oil companies. 

Crude oil prices have fallen by just over half over the last two weeks as worldwide consumption dramatically falls. 

The international benchmark, Brent crude, fell to $24.72 a  barrel while US benchmark, West Texas Intermediate, fell by 23 percent to $20.48 per barrel. 

The sudden price fall has been blamed by many on the loss of demand for oil due to travel restrictions across many nations. 

Meanwhile, oil suppliers have not cut down production meaning there is surplus stock for retailers to buy at cheap values. 

READ MORE: UK fuel duty rates frozen for tenth year

Increased oil supplies will mean retailers and supermarkets pay less to stock fuels in their forecourts. 

If these retailers pass over savings to their customers it could see petrol and diesel costs slashed even lower. 

Fuel pump prices across the UK have fallen amidst the coronavirus epidemic with total costs down for the sixth week in a row. 

Petrol prices have fallen from 127.33 pence per litre at the end of January to just 120.33p per litre this week. 

Motoring experts at the RAC have been pushing for further reductions by forecourts to better reflect the cheaper wholesale prices. 

The group has claimed at least 10p per litre needs to come off the price of each fuel which will bring petrol costs down to around 112pence per litre.

This reduction would see motorists save a total of £5.40 to fill up a 55 litre car with petrol and £5.30 to top up a diesel tank. 

However, they have also called for supermarkets to sell the fuels for even cheaper with costs of 108pence per litre for petrol and 111p per litre for diesel suggested by the recovery group.

Simon Williams, RAC fuel spokesman said: “All eyes are now on the UK’s fuel retailers, large and small, to cut fuel prices considerably, and fast. 

“It is vital drivers are given a fair deal and retailers accurately reflect the lower wholesale prices at their forecourts.”

Published at Thu, 19 Mar 2020 07:42:00 +0000