Reduction in wholesale prices
Motorists have received some ‘good news’ for a change and just when we most need it. Supermarkets have reduced the price of fuel. Asda, Morrisons, Sainsbury's and Tesco have all announced reductions that will take effect from now.
Asda prices are now at approximately 126.7p a litre for petrol and 133.7p for diesel. Morrisons will follow this lead and bring down the price of both diesel and unleaded by to 2p a litre at the majority of its fuel stations. Sainsbury’s reduction is ‘up to 3p a litre’ off petrol and diesel and Tesco will bring their prices down by ‘up to 2p a litre’
RAC head of external affairs Pete Williams said "motorists should be pleased that fuel retailers have acted so swiftly in lowering prices at the pumps following a reduction in wholesale prices. The wholesale price of petrol is now at a year-low of around one pound a litre whereas the diesel price is unfortunately still several pence a litre away from its low point in early May (104.87p). AA public affairs head Paul Watters said "Asda's pump price cut is a bold move. Although it reflects a fall in the wholesale price of petrol during last week, the continued disruption of Libyan oil production continues to leave the market volatile and unpredictable."
These price cuts will be widely welcomed by UK motorists and it is encouraging to see that the drop in the wholesale price of fuel is being passed on. Motoring.co.uk comments; the last few years have been very tough for the consumer and especially the motorist and it is all about survival, we have seen many motorists downgrading from petrol guzzling cars to something more economical with lower insurance and lower tax another reduction in fuel will be very much welcomed.
Oil analyst Richard Mallison said it was significant that retailers were passing on the fall in wholesale oil prices to consumers on the forecourt. He told Sky News "the biggest reason for supermarkets being able to slash prices at the pump has been the change in the dollar-to-pound exchange rate. The dollar's weakened, that's brought down the cost of oil and wholesale fuel and that's now being passed on." But he warned that low prices may not last for long. He said "we've seen the UK recovery stronger than expected, we've seen the troubles with the US shutdown and debt ceiling both of those effects might fade in terms of the exchange rate, which would then mean petrol prices starting to go up again."