RAC fuel spokesman Simon Williams said: “This is looking like the
biggest single daily drop in the oil price in 20 years. It should
translate to some serious cuts at the pumps, particularly as the
price of both petrol and diesel is still overpriced despite two
rounds of cuts from the supermarkets last month.
“The last time we saw the wholesale price of petrol this low was
in March 2016 which led to an average price of 106p a litre two
weeks later. That’s nearly 17p a litre below the current average
of 122.85p. The diesel wholesale price was last this low in
September 2016 which yielded a price of 113p a litre – 12.5p
below its current UK average of 125.59p. It might be a bit too
much to think we will see these prices again based on a one-day
drop in the oil price but we ought to see at least 10p a litre
coming off the price of unleaded in the next fortnight which
would produce an average of 113p – a price last seen in October
2016.
“Having said that, much will depend on what the Chancellor does
in his Budget on Wednesday and we strongly hope he does not see
this an opportunity to hike fuel duty given the currently
volatility of the oil market.
“We strongly urge every fuel retailer – large and small – to pass
on these savings as soon as possible. But we expect the big
supermarkets who sell the lion’s share of fuel to lead the way
with some swift and significant cuts in the next few days.
“Ironically, the latest oil price collapse has been brought on by
OPEC and its allies, principally Russia, failing to agree another
round of production cuts to prop up the barrel price in the wake
of the slump caused by the coronavirus impacting global demand.
Russia appears to want to keep the price of oil low to hurt the
US’s shale oil production, while Saudi Arabia seems to want to
make a point to Russia that it can withstand an even lower oil
price as its cost of production is the lowest in the world.”
