Drivers Hoping For £1 Per Litre Petrol As Supermarkets Slash Price Of Unleaded

Drivers Hoping For £1 Per Litre Petrol As Supermarkets Slash Price Of Unleaded
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The cost of fuel has been tipped to drop to £1 per litre after falling oil prices led to supermarkets slashing the cost of unleaded petrol by 2p a litre.

Asda, Tesco and Morrisons have introduced the reduction across their forecourts, and Sainsbury's is set to do the same on Saturday.

Asda said it would be giving motorists a "weekend boost" that will see customers pay no more than 109.7p per litre across its 272 filling stations.

The move means that in the last month the retailer has cut the price of unleaded by 5p per litre and diesel by 9p.

RAC spokesman Rod Dennis said: "The reason we've been slower to see unleaded price cuts is because the wholesale price of petrol - the price retailers buy the fuel for - has not fallen at the same rate diesel has. Diesel has been on a steady downward path since the start of May, driven by increased capacity from Asia, but the same cannot be said for petrol.

"If the conditions stay right, we could see some even lower prices in a few weeks as people return to work after the summer and the school run begins again. And if Brent Crude were to move to the 40 US dollar per barrel mark, the prospect of some enterprising retailers selling fuel for £1 per litre will make a return."

He added: "The heat has really been taken out of the cost of motoring this summer, with the big four supermarkets now selling unleaded and diesel for considerably less than in recent months.

"Drivers should be noticing cheaper fuel across the UK, with some independent retailers also proving to be fiercely competitive when it comes to price.

"While we think there is potential for more movement on prices in the coming weeks, it is positive that all motorists are now benefiting from the plummeting price of oil."

Morrisons said its latest cuts mean unleaded is 15p a litre cheaper than 2014's August Bank Holiday, making it £7.50 less to fill up a typical family car.

Jamie Winter, services director for the supermarket, said: "The current weakness in world markets is working in the favour of motorists because plummeting oil prices are combining with a strong pound to help us reduce petrol prices."

Steve Gooding, director of the RAC Foundation, welcomed the news, adding that with oil trading at the same price as it was in January, more cuts could be expected.

He added: "The current retail margin on petrol is almost twice as much as the long-term average which is another indicator that pump prices could fall further.

"However it is worth remembering that the biggest influence on what motorists pay at the forecourts is not the oil price but taxation."