We’ve certainly been here before, but talk of petrol prices dropping below one Pound per litre is once again beginning to escalate.
The chances are you have some big journeys coming up over the holiday season, and a cheaper fill-up would definitely leave a little extra cash in your pocket, so just how hopeful should you be that £1 per litre will become a reality in the coming weeks?
Well, the first thing to consider is the global oil glut, something we discussed in detail earlier this week. The subject also features heavily in a report on the prospect of cheaper fuel in The Express this week.
Put simply, there’s far more oil sitting in stockpiles around the world than the industry needs. In simpler times, OPEC nations in the Middle East could have simply reduced the supply to boost the price, but OPEC has declined to do this as it could allow other oil producing nations to more easily compete for market share. As a result, oil is cheap, and expected to remain cheap for the foreseeable future.
This situation has a knock-on effect in terms of the cost of wholesale petrol and diesel – and, in turn, what you pay at the fuel pumps.
In the report, The RAC spokesman Simon Williams states that we are “a way off” seeing average prices fall to the one Pound per litre mark. However, he feels there’s a “good chance” that some retailers will find a way to offer such prices to customers. If this does come to fruition, we’d expect the supermarkets to take the lead, as they so often do.
Nothing is certain when it comes to the price of fuel, and it’s fair to say that past history has shown The RAC to be generally more optimistic on low prices than the AA, but all the stars seem to be suitably aligned for further price drops on this occasion. The RAC expect an average fall of two pence per litre over the next fortnight, and like you, we’ll be hoping they’re right.
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