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Petrol prices set to drop?

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Petrol stations across the North East have slashed their prices after international oil costs decreased dramatically.

Supermarkets like Tesco, Asda, and Morrisons around the Scunthorpe area have cut costs by 3p on their diesel and petrol prices, a move that is been praised highly by local motorists.

Since the opening of emergency reserves by the International Energy Agency, oil prices have dropped, and continue to do so. Crude oil fell by $8 a barrel on Thursday after the International Energy Agency (IEA) decided to release a stockpile of 60 million barrels over the next 30 days to make up for production shortfalls in Libya.

This is only the third emergency release in the 37-year history of the IEA, and is expected to increase supply around the globe by 2.5% for the next month.

Julian Jessop, of Capital Economics, predicted crude oil would fall back below $90 a barrel by the end of the year as the global economy slows, and hopefully the benefits will get passed on to motorists.

High fuel prices have affected a record 75% of motorists, who have had to cut back on journeys, as wages are failing to meet the increasing cost of living.

Benefits will be seen around all of Britain as supermarkets intend to cut their prices nationwide.

Asda stepped up to the plate and sparked a price war yesterday by reducing their prices by a further 2p, meaning that a motorist can now fill up for 128.7p a litre with petrol, and a 132.7p a litre for diesel. 

Asda's petrol director, Andy Peake, said: "Customers shouldn’t have to buy into gimmicks and promotions to benefit from cheaper petrol – no one should have to pay a premium on food to lower the cost of fuel.”

Sainsbury’s have swiftly responded by advising they will further cut their petrol prices by ‘up to 2p’, and also intend to introduce an offer of 10p off every litre for customers who spend £60 in store or online.

Point 2 Point parcels, a courier service has made clear their delight in the news. Currently their fleet of vehicles currently use around 150litres a day of petrol. A 2p reduction in price could see the company saving £1095 a year on petrol.

Petrol Facts

·         Latest average UK prices: petrol 136.12p; diesel 139.98p.

·         A year ago, average petrol cost 118.24p; diesel 120.74p.

·         Typical 50-litre car refill costs £8.94 more than a year ago.

·         Typical 80-litre van refill costs £15.39 more than a year ago.

·         On May 9, petrol rose to a record 137.43p; diesel hit 143.04p

By Ben Malkin ©Copyright Autonet Insurance