Prices soften on the forecourt
Fuel prices dipped in July to end four months of steady price rises on the forecourts.
According to figures from the RAC’s July Fuel Watch report, the price of unleaded decreased by nearly half a per cent, falling from 112.20p to 111.79p. Meanwhile, diesel drivers saw the average price dipped from 112.47p to 112.41p.
These falls come following a fall in wholesale prices. In July, retailers had to pay 4.41p less for a litre of unleaded and 4.67p for same amount of diesel as the weakening oil market saw the price of a barrel oil decline.
But while acknowledging that July’s fall in average petrol prices are slight, RAC’s fuel spokesman Simon Williams welcomed the reversal they bring to four-months of price hikes.
He said, ‘We are hopeful that the early August supermarket cut will make a bigger difference to household budgets in the summer holiday period even though it came a more than a week later than it should have done.’
The figures also show that there was some variation across the UK as a whole in terms of average petrol prices.
Drivers in the East Midlands enjoyed the biggest cuts, with the price of unleaded there dropping by 1.53p a litre and diesel by 0.95p. By contrast Northern Ireland saw only a 0.33p drop in the price of petrol and a 0.13p fall in the cost of diesel.
Previously there had been fears that the decline in the value of sterling sparked by the result of the EU referendum would trigger an increase in the value of fuel, which is traded in dollars. But the figures show that the Brexit decision failed to impact wholesale fuel costs negatively.
Simon continued, ‘The falling price of fuel on the wholesale market is being driven by fears of slowing global economic growth adding to an existing oversupply of both crude oil and refined products such as petrol and diesel. Interestingly, this has happened at a time when there are oil supply disruptions in Nigeria and Libya which had they not occurred would have meant there was even more oil on the world market.
‘As it is motorists continue to benefit from the lower oil price which had led to petrol prices that are nearly 5p a litre cheaper than a year ago and diesel that’s more than 3p a litre less expensive.’